SY Holdings Group Limited — Proxy Solicitation & Information Statement 2023

Nov 21, 2023

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in the Company, you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale 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.

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SY HOLDINGS GROUP LIMITED 盛業控股集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6069)

MAJOR TRANSACTIONS – PROVISION OF FINANCIAL ASSISTANCE TO AFFILIATED COMPANIES; AND ENTRY OF THE FACILITY AGREEMENT

Capitalised terms used on this cover page have the same meaning as defined in the section headed “Definitions” in this circular, unless the context requires otherwise.

A letter from the Board is set out on pages 5 to 16 of this circular.

The Transactions have been approved by written shareholders’ approval obtained from a Shareholder who holds more than 50% of the voting rights at that general meeting of the Company, pursuant to Rule 14.44 of the Listing Rules in lieu of a general meeting of the Company. This circular is being despatched to the Shareholders for information only.

21 November 2023

CONTENTS

	Pages
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix I – Financial Information of the Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix II – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21

– i –

DEFINITIONS

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

• “affiliated company” has the meaning ascribed to it under the Listing Rules “Agreements” collectively, (1) the Previous NBGF Financial Assistance Agreement as revised by the Supplemental Financial Assistance Agreement; (2) the Amended Financial Assistance Agreement; and (3) the Facility Agreement

• “Amended Financial the financial assistance agreement entered into between SY Factoring Assistance Agreement” and Ocean Holdings on 28 September 2023 (after trading hours of the Stock Exchange)

• “Articles of Association” Articles of Association of the Company, as amended from time to time “associate(s)” has the meaning ascribed to it under the Listing Rules

• “Board” the board of Directors “Business Day(s)” any day (excluding a Saturday, Sunday and public holidays in Hong Kong SAR) on which licensed banks are generally open for business in Hong Kong SAR and the Stock Exchange is generally open for trading of securities in Hong Kong SAR

• “Company” SY Holdings Group Limited 盛業控股集團有限公司 , an exempted company duly incorporated in the Cayman Islands with limited liability, whose Shares are listed on the Stock Exchange (stock code: 6069)

• “connected person(s)” has the meaning ascribed to it under the Listing Rules “Customer HJ” Hongji Commercial Factoring (Shenzhen) Limited* 弘基商業保理 ( 深 圳 ) 有限公司 , a company established in the PRC with limited liability

• “Digital Financing supply chain financing solutions provided by the Group to its Solutions” customers through the Platform, including but not limited to accounts receivable-based lending and loan guarantee services

• “Director(s)” the director(s) of the Company “Facility Agreement” the facility agreement entered into between SY Factoring and Customer HJ dated 31 October 2023

• “Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong SAR

– 1 –

DEFINITIONS

“Hong Kong SAR”	the Hong Kong Special Administrative Region of the PRC
“Independent Shareholders”	Shareholders who are not required to abstain from voting at the meeting
	to approve the Transactions should one had to be held without written
	shareholder’s approval
“Independent Third Party”	the independent third party(ies) who is/are, to the best of the Directors’
	knowledge, information and belief having made all reasonable enquiries,
	independent of and not connected with the Company and the connected
	person(s) (as defined in the Listing Rules) of the Company
“IoT”	Internet-of-Things
“Latest Practicable Date”	13 November 2023, being the latest practicable date for the purpose of
	ascertaining information contained in this circular before its despatch
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“LPR”	the Loan Prime Rate published by the People’s Bank of China*中國人
	民銀行from time to time
“NBGF”	Ningbo Guofu Commercial Factoring Co., Ltd*寧波國富商業保理有
	限公司
“NDIG”	Ningbo Development & Investment Group Co., Ltd.*寧波開發投資集
	團有限公司
“NLP”	natural language processing
“Ocean Holdings”	Qingdao West Coast New Area Ocean Holdings Group Limited*青島西
	海岸新區海洋控股集團有限公司
“Ocean Holdings Factoring”	Qingdao Ocean Holdings Factoring Limited*青島海控商業保理有限
	公司
“Ocean Holdings Investment”	Qingdao Ocean Holdings Investment Holdings Limited*青島海控投資
	控股有限公司
“OCR”	optical character recognition
“PRC” or “Mainland China”	the People’s Republic of China which, for the purpose of this circular,
	excludes Hong Kong SAR, the Macau Special Administrative Region of
	the People’s Republic of China and Taiwan

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DEFINITIONS

• “Previous Facility collectively, (1) the facility agreement dated 29 March 2019; (2) the Agreements supplemental facility agreement dated 30 April 2020; (3) the second (Customer HJ)” supplemental facility agreement dated 30 October 2020; (4) the third supplemental facility agreement dated 30 April 2021; (5) the fourth supplemental facility agreement dated 29 October 2021; (6) the fifth supplemental facility agreement dated 29 April 2022; (7) the sixth supplemental facility agreement dated 31 October 2022; and (8) the seventh supplemental facility agreement dated 27 April 2023, all of which were entered into between SY Factoring and Customer HJ

• “Previous NBGF Financial the financial assistance agreement entered into among Sheng Long, SY Assistance Agreement” Factoring and NBGF on 23 September 2022 (after trading hours of the Stock Exchange)

• “Previous OHF Financial the financial assistance agreement entered into between SY Factoring Assistance Agreement” and Ocean Holdings on 1 March 2023 (after trading hours of the Stock Exchange)

• “Qingdao Sunful” Qingdao SY Sunful Supply Chain Management Limited* 青島盛業曉 盛供應鏈管理有限公司

• “RMB” Renminbi, the lawful currency of the PRC “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company “Shareholder(s)” holder(s) of the Shares from time to time “Sheng Long” Shenglong Information Technology Services (Ningbo) Co., Ltd* 盛隆信 息科技服務（寧波）有限公司

• “SME(s)” small and medium enterprise(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “subsidiary” has the meaning ascribed to it under the Listing Rules “SY Factoring” SY Factoring Limited* ( 盛業商業保理有限公司 ) “Transactions” collectively, (1) the NBGF Financial Assistance; (2) the OHF Financial Assistance; and (3) the transactions contemplated under the Facility Agreement

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DEFINITIONS

“U.S.” or “United States” the United States of America, its territories and possessions and all areas subject to its jurisdiction “US$” the United States dollar, the lawful currency of the United States “Wisdom Cosmos” Wisdom Cosmos Limited, a company incorporated in the British Virgin Islands, is the beneficial owner of 560,601,960 Shares, representing approximately 56.64% shareholding interests in the Company “%” per cent

References to time and dates in this circular are to Hong Kong time and dates.

• For identification purpose only

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LETTER FROM THE BOARD

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SY HOLDINGS GROUP LIMITED 盛業控股集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6069)

Executive Directors:

Mr. Tung Chi Fung (Chairman) Mr. Chen Jen-Tse

Non-executive Director:

Registered Office:

Windward 3, Regatta Office Park PO Box 1350 Grand Cayman KY1-1108 Cayman Islands

Mr. Lo Wai Hung

Headquarters and principal place of

Independent Non-executive Directors:

Mr. Loo Yau Soon Mr. Fong Heng Boo Mr. Tang King San Terence Ms. Chan Yuk Ying Phyllis

business in the Mainland China:

10/F and 18/F Kerry Plaza Tower 2 1-1 Zhong Xin No. 4 Road Futian, Shenzhen 518048 PRC

Principal Place of Business in Hong Kong SAR:

Room 4202, 42/F Tower 1, Lippo Centre 89 Queensway, Admiralty Hong Kong SAR

21 November 2023

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTIONS – PROVISION OF FINANCIAL ASSISTANCE TO AFFILIATED COMPANIES; AND ENTRY OF THE FACILITY AGREEMENT

I. BACKGROUND

Reference is made to the announcements of the Company dated 29 March 2019, 3 May 2020, 30 October 2020, 30 April 2021, 29 October 2021, 29 April 2022, 23 September 2022, 31 October 2022, 1 March 2023, 27 April 2023, 28 September 2023 and 31 October 2023 and the circular of the Company dated 24 June 2019.

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LETTER FROM THE BOARD

To support the business development of NBGF (an affiliated company of the Company) and Ocean Holdings Factoring (an affiliated company of the Company) and to finance the operation of supply chain finance business respectively engaged by these two affiliated companies, the Company announced that on 28 September 2023 (after trading hours of the Stock Exchange):

• (a) Sheng Long (an indirect non-wholly owned subsidiary of the Company) and SY Factoring (an indirect wholly owned subsidiary of the Company) entered into the Supplemental Financial Assistance Agreement with NBGF. Pursuant to the Previous NBGF Financial Assistance Agreement as revised by the Supplemental Financial Assistance Agreement, the parties agreed, among other things, that (i) Sheng Long shall provide guarantees as security for the debt financing of NBGF in proportion to its shareholding interest in NBGF, in which SY Factoring shall provide joint and several guarantees (the “ Financial Assistance A ”); (ii) Sheng Long shall provide shareholder loans to NBGF (the “ Financial Assistance B ”, together with the Financial Assistance A, the “ NBGF Financial Assistance ”); and (iii) as compared to the Previous NBGF Financial Assistance Agreement, the maximum daily limit of the NBGF Financial Assistance and the utilisation of Financial Assistance A will be increased, whereas the term of the NBGF Financial Assistance will be extended; and

• (b) SY Factoring (an indirect wholly owned subsidiary of the Company) and Ocean Holdings entered into the Amended Financial Assistance Agreement. Pursuant to the Amended Financial Assistance Agreement, the parties agreed, among other things, that (i) Ocean Holdings shall provide guarantees as security for the debt financing of Ocean Holdings Factoring (“ Controlling Shareholder Guarantees ”) and/or provide shareholder loans to Ocean Holdings Factoring (“ Controlling Shareholder Loans ”); (ii) SY Factoring shall, in proportion to the shareholding interest of Qingdao Sunful (an indirect wholly owned subsidiary of the Company) in Ocean Holdings Factoring, (a) provide counter guarantees to Ocean Holdings in respect of the Controlling Shareholder Guarantees (the “ Financial Assistance C ”); and/or (b) provide joint and several guarantees to Ocean Holdings in respect of the Controlling Shareholder Loans (the “ Financial Assistance D ”, together with the Financial Assistance C, the “ OHF Financial Assistance ”); and (iii) as compared to the Previous OHF Financial Assistance Agreement, the maximum daily limit of each the Controlling Shareholder Guarantees, the Controlling Shareholder Loans and the OHF Financial Assistance will be increased, whereas the term of each of the Controlling Shareholder Guarantees, the Controlling Shareholder Loans and hence the OHF Financial Assistance will be extended.

Additionally, in line with the Group’s “Dual-Engine, One-Platform” strategy, the Group is providing Digital Financing Solutions and platform-based services to its customers through the Group’s proprietary fintech platform, known as “SY Cloud Platform” (the “ Platform ”). The Platform incorporates a comprehensive suite of technologies such as electronic signatures, OCR, NLP, big data analytics, video authentication and facial recognition, to automate and facilitate the Group’s risk management system, as well as to ensure a seamless customer experience for online application and the approval process. The maximum amount of the Digital Financing Solutions to be provided through the Platform to each of the customers shall not exceed the credit limit granted in the facility agreement entered into by the Group and each of the customers respectively. In consideration of prudent operations as well as the changing risks, the Group will review and revise the previous facility agreements from time to time.

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LETTER FROM THE BOARD

Accordingly, on 31 October 2023, SY Factoring entered into the Facility Agreement with Customer HJ, pursuant to which SY Factoring and its associated companies agreed to grant a revolving and comprehensive credit limit of RMB1,000,000,000 to Customer HJ in relation to the Digital Financing Solutions to be provided through the Platform.

As one or more of the relevant percentage ratios (as defined under the Listing Rules) in respect of each of the Transactions exceeds 25% but is less than 100%, respectively, each of the Transactions constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The purpose of this circular is to provide you with, among other things, (i) further details of the Transactions; (ii) financial information on the Group; and (iii) other information as required under the Listing Rules.

II. PRINCIPAL TERMS OF THE AGREEMENTS

The principal terms of each of the Agreements are set out below.

(a) Supplemental Financial Assistance Agreement

Date: 28 September 2023 (after trading hours of the Stock Exchange) Parties: (i) Sheng Long; (ii) SY Factoring; and (iii) NBGF.

Term of the NBGF From the date of the Supplemental Financial Assistance Financial Assistance: Agreement to 31 December 2025 (which was 23 September 2022 to 22 September 2024 in the Previous NBGF Financial Assistance Agreement).

Financial Assistance A: Sheng Long shall provide unsecured guarantees as security for the debt financing of NBGF in proportion to its shareholding interest in NBGF, in which SY Factoring shall provide joint and several guarantees. Sheng Long and SY Factoring will not charge any fee on NBGF in relation to the Financial Assistance A.

Financial Assistance B: Sheng Long shall provide unsecured shareholder loans jointly with NDIG to NBGF in proportion to their respective shareholding interest in NBGF, the interest rate of which shall not exceed the LPR of the corresponding maturity term.

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LETTER FROM THE BOARD

Maximum daily limit of the NBGF Financial Assistance: Utilisation:

The aggregated maximum amount of the NBGF Financial Assistance shall not exceed RMB2.1 billion (which was RMB875 million in the Previous NBGF Financial Assistance Agreement) subject to compliance with the relevant regulatory requirement.

The amount of Financial Assistance A corresponding to the principal balance of debt financing actually used shall not exceed RMB1,575 million (which was RMB630 million in the Previous NBGF Financial Assistance Agreement) per month during the relevant term.

Basis of determination

The maximum daily limit and interest rate of the NBGF Financial Assistance was determined by the parties based on arm’s length negotiation by considering: (i) the anticipated business expansion and growing funding needs of NBGF subsequent to the increase in its registered capital; (ii) the original terms of the Previous NBGF Financial Assistance Agreement; (iii) the credit rating and repayment track record of NBGF; (iv) the credit rating and endorsement of the state-owned shareholder NDIG; and (v) the Group will benefit as a shareholder from NBGF’s growing business scale and business income.

As at the Latest Practicable Date, approximately RMB484.5 million of the NBGF Financial Assistance has been utilised by NBGF, RMB397.0 million of which constitutes guarantees as security for banking facilities utilised by NBGF, and an interest income of approximately RMB6.3 million has been derived from the NBGF Financial Assistance. The NBGF Financial Assistance by the Group is financed by its internal resources and/or external borrowings. The principal amount and interest income derived from the Financial Assistance B provided by the Group would be repaid to the designated bank account of the Group via bank remittance.

Save as disclosed in this circular, all the terms of the Previous NBGF Financial Assistance Agreement shall remain unchanged in all material respects and are in full force and effect.

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LETTER FROM THE BOARD

(b) Amended Financial Assistance Agreement

Date:

28 September 2023 (after trading hours of the Stock Exchange)

Parties: (i) Ocean Holdings; and

• (ii) SY Factoring.

Controlling Shareholder Ocean Holdings shall provide guarantees as security for the debt Guarantees: financing of Ocean Holdings Factoring.

• Controlling Shareholder Ocean Holdings shall provide shareholder loans to Ocean Holdings Loans: Factoring.

• Maximum daily limit of the Controlling Shareholder Guarantees and the Controlling Shareholder Loans:

• The aggregated maximum daily average balance of the Controlling Shareholder Guarantees and the Controlling Shareholder Loans (which was RMB1 billion in the Previous OHF Financial Assistance Agreement) shall not exceed:

• (i) RMB1.7 billion up to the date of 31 December 2023; and

• (ii) 10 times of the net assets of Ocean Holdings Factoring during the period from 1 January 2024 to 31 December 2025, subject to compliance with the relevant regulatory requirement.

• Term of the Controlling Shareholder Guarantees and the Controlling Shareholder Loans:

• From the date of the Amended Financial Assistance Agreement up to the date of 31 December 2025 (which was 1 March 2023 to 31 December 2023 in the Previous OHF Financial Assistance Agreement).

Financial Assistance C:

In respect of the Controlling Shareholder Guarantees, SY Factoring shall provide unsecured counter guarantees to Ocean Holdings in proportion to Qingdao Sunful’s shareholding interest in Ocean Holdings Factoring.

SY Factoring will not charge any fee on Ocean Holdings Factoring in relation to the Financial Assistance C.

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LETTER FROM THE BOARD

Financial Assistance D:

In respect of the Controlling Shareholder Loans, SY Factoring shall provide unsecured joint and several guarantees to Ocean Holdings in proportion to Qingdao Sunful’s shareholding interest in Ocean Holdings Factoring.

SY Factoring will not charge any fee on Ocean Holdings Factoring in relation to the Financial Assistance D.

• Maximum daily limit of the OHF Financial Assistance:

• The aggregated maximum daily average balance of the OHF Financial Assistance (which was RMB400 million in the Previous OHF Financial Assistance Agreement) shall not exceed:

• (i) RMB680 million up to the date of 31 December 2023; and

• (ii) four times of the net assets of Ocean Holdings Factoring during the period from 1 January 2024 to 31 December 2025.

• Term of the OHF Financial Assistance:

Within three (3) years from the expiry dates of the Controlling Shareholder Guarantees and/or the Controlling Shareholder Loans.

Basis of determination

The maximum daily limit and interest rate of the OHF Financial Assistance was determined by the parties based on arm’s length negotiation by considering: (i) the anticipated business expansion and growing funding needs of Ocean Holdings Factoring subsequent to the increase in its registered capital; (ii) the original terms of the Previous OHF Financial Assistance Agreement; (iii) the credit rating and repayment track record of Ocean Holdings Factoring; (iv) the credit rating and endorsement of the state-owned shareholder Ocean Holdings; and (v) the Group will benefit as a shareholder from Ocean Holdings Factoring’s growing business scale and business income.

As at the Latest Practicable Date, approximately RMB577.4 million of the OHF Financial Assistance has been utilised by Ocean Holdings Factoring, RMB152.2 million of which constitutes guarantees as security for banking facilities utilised by Ocean Holdings Factoring, and no interest income has been derived from the OHF Financial Assistance. The OHF Financial Assistance by the Group would be financed by its internal resources and/or external borrowings if the relevant guarantees/counter guarantees were to be enforced.

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LETTER FROM THE BOARD

(c) Facility Agreement

Date: 31 October 2023 (after trading hours of the Stock Exchange) Parties: (i) Customer HJ; and (ii) SY Factoring. Credit limit: RMB1,000,000,000 Type of credit limit: Revolving and unsecured Security: Customer HJ shall provide certain accounts receivables owned by Customers HJ of sufficient value (i.e., being no less than the utilised portion of the credit limit from time to time) as security for the provision of the Digital Financing Solutions utilised by Customer HJ in accordance with the Facility Agreement

Interest rate per annum: Not more than 8% (inclusive of tax) Expiry date: 31 October 2026

Basis of determination

The credit limit under the Facility Agreement was determined by the parties based on arm’s length negotiation by considering the capital needs of Customer HJ, the amount of accounts receivables owned by Customers HJ as security for the provision of the Digital Financing Solutions and the quality of the accounts receivables owned by Customer HJ.

The interest rate under the Facility Agreement was determined by the parties on arm’s length negotiation by considering: (i) the credit rating of Customer HJ and the debtors of the accounts receivables owned by Customer HJ: the Group will generally determine the interest rate based on the credit rating of customers and the debtors of the accounts receivables. The higher the credit rating, the lower the interest rate. The credit ratings of Customer HJ and the debtors were assessed internally by the Group’s risk management department which considered that the credit ratings of Customer HJ and the debtors of the accounts receivables were good without any overdue situation; and (ii) the credit period: the Group will also take into account the credit period when determining the interest rate. The shorter the credit period, the lower the credit risk.

The Previous Facility Agreements (Customer HJ) were expired on 31 October 2023.

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LETTER FROM THE BOARD

III. REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Group is a leading supply chain technology platform. The Group leverages its dual engine of industrial IoT (“ IIoT ”) and digital finance to create a supply chain technology platform, demonstrating its significant advantages in technological innovation. The Group leverages big data analytics to provide intelligent matching of assets to capital, offering a one-stop SaaS and fintech solution for enterprises and financial institutions, while effectively addressing the financing needs and pain points of SMEs within the supply chain ecosystem.

Backed by NDIG’s strong industrial background and the Group’s supply chain technology platform service capabilities, NBGF achieved robust growth and delightful results by adopting advanced digital technology and a smart risk management system to provide differentiated digital financial solutions for NDIG’s ecosystem, to help solve the supply chain difficulties faced by SMEs and vigorously promote supply chain digital technology services.

Additionally, backed by Ocean Holdings’ strong industrial background and financial support, as well as the Group’s mature platform services and technology capabilities, Ocean Holdings Factoring could combine the technology edge and funding advantages to build a smart platform to match supply chain assets with funding, thereby improving the efficiency of the Ocean Holdings’ supply chain.

As such, in respect of the Supplemental Financial Assistance Agreement and the Amended Financial Assistance Agreement, the Directors believe that the increment of financial assistance to be provided together with the state-owned shareholder will support both NBGF and Ocean Holdings Factoring to obtain debt financing more efficiently and economically for its business expansion. The endorsement of the state-owned shareholder also enables the Group to receive more support from the funding partners in the joint venture, thereby reducing capital costs and increasing leverage.

On the other hand, owing to its business need, Customer HJ negotiated with the Group for the provision of the Digital Financing Solutions. Since Customer HJ is able to provide the accounts receivables as securities for the Digital Financing Solutions to the Group, upon the request of Customer HJ and upon the approval of such request by the Group after assessment on the quality of their accounts receivables owned by Customer HJ, SY Factoring entered into the Facility Agreement with Customer HJ. The entry of the Facility Agreement is in the ordinary course of business of the Group, which will contribute profit to the Company over the financing term and are beneficial to the Group in its business expansion and establishment of long-term business relationship with Customer HJ.

Further, the Directors noted that (i) in view of the good credit rating of Customer HJ and taking into account the risk assessment being carried out by the Group, granting of the credit limits would not pose significant risk to the operation and the financial position of the Group; (ii) the annual interest rate and service fee (if any) are in line with the market practice; (iii) the credit rating of the debtors of the accounts receivables being the securities of the Digital Financing Solutions were good without any default; and (iv) the Group has comprehensive approval and risk assessment procedures, sound internal control system and established credit risk control policies in place which take into account internal and external factors to determine the approval of Digital Financing Solutions.

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LETTER FROM THE BOARD

Given that each of the Agreements is under normal commercial terms, and is beneficial to the Group in its business expansion and establishment of long-term business relationship with the counterparties of the Agreements, the Directors are of the view that the terms of each of the Agreements are fair and reasonable and are in the interests of the Company and Shareholders as a whole.

IV. IMPLICATIONS UNDER THE LISTING RULES

As one or more of the relevant percentage ratios (as defined under the Listing Rules) in respect of each of the Transactions exceeds 25% but is less than 100%, respectively, each of the Transactions constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

In addition, pursuant to Rules 13.13 and 13.16 of the Listing Rules, a general disclosure obligation arises where the relevant advances to an entity by the Group or the financial assistance to affiliated companies of the Group exceeds 8% under the assets ratio as defined under Rule 14.07(1) of the Listing Rules. As the Financial Assistance constitutes advances to an entity and/or financial assistances to affiliated company of the Group and the asset ratio (as defined in the Listing Rules) for the Amended Financial Assistance Agreement exceeds 8%, the Amended Financial Assistance Agreement is subject to the general disclosure obligation pursuant to Rules 13.13, 13.15 and 13.16 of the Listing Rules.

The Company will comply with the relevant disclosure requirements under Rules 13.20 and 13.22 of the Listing Rules for so long as circumstances giving rise to such disclosure obligation continue to exist.

Pursuant to Rule 14.44 of the Listing Rules, Shareholders’ approval may be obtained by written Shareholders’ approval without the need of convening a general meeting if (i) no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Transactions; and (ii) written approval has been obtained from a Shareholder who holds more than 50% of the voting rights at that general meeting of the Company to approve the Transactions.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholder is materially interested in the Transactions. As such, no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Transactions.

The Company has received a written approval of the Transactions from Wisdom Cosmos, which is beneficially interested in approximately 56.64% of the Shares as at the date of this circular, and therefore holds more than 50% of the voting rights at that general meeting of the Company. Accordingly, pursuant to Rule 14.44 of the Listing Rules, no general meeting of the Company will be convened for the purpose of approving the Transactions.

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LETTER FROM THE BOARD

V. INFORMATION OF THE PARTIES

The Group

The Group is a leading supply chain technology platform providing data-driven, efficient, and inclusive IIoT and digital financing solutions for companies across the Asia-Pacific region. As the digital economy becomes a new engine for China’s economic growth, the Group is strategically positioned as a supply chain technology platform, leveraging its technological capabilities to empower supply chains and to facilitate the digital upgrade of traditional industries. The Group is also committed to providing services which include one-stop supply chain technology services and digital financing solutions for enterprises and financial institutions, driving supply chain efficiency and making finance more inclusive.

SY Factoring is a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company, which is principally engaged in the business of, among other things, the provision of factoring services. Sheng Long is a company established in the PRC with limited liability and an indirect non wholly-owned subsidiary (as to 82.8571% equity interest) of the Company, which is principally engaged in the provision of information technology services. Qingdao Sunful is a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company, which is principally engaged in the investment in the joint venture in Qingdao city.

NDIG & NBGF

NDIG is a company established in the PRC with limited liability and it is principally engaged in the business of, among other things, project investment, asset management, real estate development and property management. NDIG is the holding company of NBGF. As at the Latest Practicable Date, to the best knowledge of the Directors after making all reasonable enquiries, both NDIG and its ultimate beneficial owner, State-owned Assets Supervision and Administration Commission of Ningbo Municipal Government* 寧波市人民政府國有資產監督管理委員 , are Independent Third Parties.

NBGF is a company established in the PRC with limited liability and it is principally engaged in the business of, among other things, the provision of commercial factoring. NBGF is owned as to 65% by NDIG and 35% by Sheng Long, and is an affiliated company of the Company.

Ocean Holdings, Ocean Holdings Investment & Ocean Holdings Factoring

Ocean Holdings is a state-owned company established in the PRC with limited liability and it is principally engaged in the business of, among other things, investment management, asset operation, equity management and capital operation as well as fund management. Ocean Holdings is the direct sole shareholder of Ocean Holdings Investment. As at the Latest Practicable Date, to the best knowledge of the Directors after making all reasonable enquiries, save as its indirect shareholding in Ocean Holdings Factoring, both Ocean Holdings and its ultimate beneficial owner, the State-owned Assets Administration Bureau of Qingdao West Coast New Area* 青島市西海岸 新區國有資產管理局 , are Independent Third Parties.

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LETTER FROM THE BOARD

Ocean Holdings Factoring is a company established in the PRC with limited liability and it is principally engaged in the business of, among other things, the provision of commercial factoring. Ocean Holdings Factoring is owned as to 60% by Ocean Holdings Investment and 40% by Qingdao Sunful, and is an affiliated company of the Company.

Customer HJ

Customer HJ is a company established in the PRC with limited liability and is principally engaged in the business of commercial factoring. As at the Latest Practicable Date, to the best knowledge of the Directors after making all reasonable enquiries, both Customer HJ and the ultimate beneficial owner of Customer HJ, Wong Yuk ( 黃煜 ) who is a merchant, are Independent Third Parties.

VI. FINANCIAL EFFECT OF THE TRANSACTIONS

The provision of the NBGF Financial Assistance to NBGF would be financed by the Group’s internal resources and/or external borrowings. Pursuant to the Supplemental Financial Assistance Agreement, (i) as a result of providing the Financial Assistance A, the liabilities arising from guarantee contracts was expected to increase; and (ii) as a result of providing the Financial Assistance B, the loans to an associate was expected to increase while the bank balances and cash was expected to decrease. The provision of the NBGF Financial Assistance would not have material impact on the net asset value of the Group. The earnings of the NBGF Financial Assistance would be the net effect of (i) the interest income accrued from the Financial Assistance B which would be recorded as other income of the Group; (ii) the increase in share of results of associates due to the provision of the NBGF Financial Assistance; and (iii) the impairment losses under expected credit loss (“ ECL ”) model.

The provision of the OHF Financial Assistance to OHF would be financed by the Group’s internal resources and/or external borrowings. Pursuant to the Amended Financial Assistance Agreement, as a result of providing the Financial Assistance C and the Financial Assistance D, the liabilities arising from guarantee contracts was expected to increase. The provision of the OHF Financial Assistance would not have material impact on the net asset value of the Group. The earnings derived from the Amended Financial Assistance Agreement would be the net effect of (i) the increase in share of results of associates due to the provision of the OHF Financial Assistance; and (ii) the impairment losses under ECL model.

The provision of the Digital Financing Solutions to Customer HJ would be financed by the Group’s internal resources and/or external borrowings. Pursuant to the Facility Agreement, as a result of providing the Digital Financing Solutions, the supply chain assets was expected to increase while the bank balances and cash was expected to decrease. The provision of the Digital Financing Solution to Customer HJ would not have material impact on the net asset value of the Group. The earnings under the Facility Agreement would be the net off of (i) income derived from the provision of the Digital Financing Solutions to Customer HJ which would be recorded as interest income of the Group; and (ii) the impairment losses under ECL model.

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LETTER FROM THE BOARD

VII. RECOMMENDATION

Having considered the reasons set out above, the Directors are of the opinion that the Transactions are conducted in the ordinary and usual course of business of the Company, the terms of the Agreements are fair and reasonable, on normal commercial terms or better to the Group, and in the interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the relevant ordinary resolution regarding the Transactions if the Company were to convene an extraordinary general meeting for the approval of the Transactions.

The above statement is for Shareholders’ reference only given that the Company has already obtained the written approval from Wisdom Cosmos for the Transactions and hence pursuant to Rule 14.44 of the Listing Rules, no general meeting of the Company will be convened to approve the Transactions.

VIII. FURTHER INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

Yours faithfully, By order of the Board SY Holdings Group Limited TUNG Chi Fung Chairman

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

Details of the consolidated financial information of the Group for each of the three years ended 31 December 2020, 2021 and 2022 and for the six months ended 30 June 2023 are disclosed in the following documents which have been published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.syholdings.com):

• the Company’s annual report for the year ended 31 December 2020 published on 31 March 2021 (pages 46 to 172), which can be accessed by the direct hyperlink below:

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0331/2021033101000.pdf

• the Company’s annual report for the year ended 31 December 2021 published on 14 April 2022 (pages 55 to 189), which can be accessed by the direct hyperlink below:

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0414/2022041400336.pdf

• the Company’s annual report for the year ended 31 December 2022 published on 27 April 2023 (pages 66 to 209), which can be accessed by the direct hyperlink below:

https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0427/2023042700571.pdf

• the Company’s interim report for the year ended 30 June 2023 published on 15 September 2023 (pages 42 to 100), which can be accessed by the direct hyperlink below:

https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0915/2023091500342.pdf

2. INDEBTEDNESS STATEMENT

As at the close of business on 30 September 2023, the Group has outstanding loans from related parties of approximately RMB462.2 million, borrowings of approximately RMB6,092.1 million, guarantee fee payable of approximately RMB10.5 million, other financial liabilities at fair value through profit or loss (“ FVTPL ”) of approximately RMB67.1 million and lease liabilities of approximately RMB23.8 million, details of which are as follows:

Loans from related parties – Secured and guaranteed – Secured and unguaranteed – Unsecured and guaranteed Sub total	RMB million 189.5 242.6 30.1
	462.2

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

RMB million

Borrowing Bank borrowings – Secured and guaranteed – Secured and unguaranteed – Unsecured and guaranteed Other borrowings – Secured and guaranteed – Secured and unguaranteed – Unsecured and unguaranteed Sub total Guarantee fee payable – Unsecured and unguaranteed Other financial liabilities at FVTPL (principal amount) – Unsecured and guaranteed Lease liabilities – Secured and unguaranteed – Unsecured and unguaranteed Sub total Total	2,963.2 654.8 15.0 1,939.7 245.8 273.6
	6,092.1
	10.5
	67.1
	23.6 0.2
	23.8
	6,655.7

As at 30 September 2023, the above secured loans from related parties of the Group are secured by supply chain assets or bills. The above guaranteed loans from related parties of the Group are guaranteed by PRC subsidiaries of the company and the controlling shareholder of the company.

As at 30 September 2023, the above secured borrowings of the Group are secured by supply chain assets, bills, investment property, equity tranche, shares of a subsidiary indirectly held by the Company, shares and assets of subsidiaries, structured deposits and/or bank deposits. The above guaranteed borrowings of the Group are guaranteed by the Company, the subsidiaries of the Company, the controlling shareholder of the Company, Wuxi Tonghui Investment Co., Ltd ( 無錫通匯投資有限公司 ) (“ Wuxi Tonghui ”) and/or Wuxi Communications Industry Group Co., Ltd ( 無錫市交通產業集團有限公司 (“ Wuxi Communications ”).

As at 30 September 2023, the above guaranteed other financial liabilities at FVTPL of the Group are guaranteed by the Company.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As at 30 September 2023, the above secured and unguaranteed lease liabilities are secured by deposits.

As at 30 September 2023, the Group has authorised or created but unissued debt securities amounting to RMB1,700.0 million and all of them are unsecured and unguaranteed.

Contingent liabilities

As at 30 September 2023, the Group provided guarantees to loans amounting to RMB1670.2 million, raised by associates of the Group from banks and the controlling shareholder of the associates.

Except as described above and apart from intra-group liabilities, normal trade and other payables and guarantee contracts for service provided to customers which are part of the normal business, as at 30 September 2023, being the latest practicable date for determining our indebtedness, the Group did not have any outstanding loan capital issued or agreed to be issued, bank overdrafts, loans, debt securities, borrowings or other similar indebtedness, liabilities under acceptance (other than normal trade bills) or acceptance credits or hire purchase commitments, debentures, mortgages, charges, guarantees or other material contingent liabilities.

3. FINANCIAL AND TRADING PROSPECT OF THE GROUP

The Group is a leading supply chain technology platform providing data-driven efficient and inclusive industrial technology and digital financing solutions for companies across the Asia-Pacific. Amidst the surge in connectivity and digitalization shaping the future of economies and businesses, the Group strategically positions itself as the one-stop supply chain technology and digital financing solution for enterprises and financial institutions, driving supply chain efficiency and making finance more inclusive.

For the year ended 31 December 2022, the profit for the year attributable to the owners of the Company was approximately RMB219.4 million.

Backed by the strong industrial background of NDIG and Ocean Holdings as well as the Group’s supply chain technology platform service capabilities, NBGF and Ocean Holdings Factoring achieved robust growth and delightful results by adopting advanced digital technology and a smart risk management system to provide differentiated digital financial solutions for the ecosystem of NDIG and Ocean Holdings, to help solve the supply chain difficulties faced by SMEs and vigorously promote supply chain digital technology services.

The increment of financial assistance to be provided together with the state-owned shareholder will support NBGF and Ocean Holdings Factoring to obtain debt financing more efficiently and economically for its business expansion. The endorsement of the state-owned shareholder also enables the Group to receive more support from the funding partners in the joint venture, thereby reducing capital costs and increasing leverage.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Owing to its business need, Customer HJ negotiated with the Group for the provision of the Digital Financing Solutions. Since Customer HJ is able to provide the accounts receivables as securities for the Digital Financing Solutions to the Group, upon the request of Customer HJ and upon the approval of such request by the Group after assessment on the quality of its accounts receivables owned by Customer HJ, SY Factoring entered into the Facility Agreement with Customer HJ. The entry of the Facility Agreement is in the ordinary course of business of the Group, will contribute profit to the Company over the financing term and are beneficial to the Group in its business expansion and establishment of long-term business relationship with the Customer HJ.

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirmed that they were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2022, being the date to which the latest published audited consolidated financial statements of the Company were made up.

5. WORKING CAPITAL

The Directors are of the opinion that, after taking into account the financial resources available to the Group (including but not limited to the internally generated cash flows, existing bank balances, bank borrowings and available credit facilities), the Group has sufficient working capital for its present requirements for at least 12 months from the date of this circular. The Company has obtained the relevant confirmation as required under Rule 14.66(12) of the Listing Rules.

– 20 –

GENERAL INFORMATION

APPENDIX II

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 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

As at the Latest Practicable Date, the interests or short positions of the Directors and the chief executive of the Company 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 required to be: (i) notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the Securities and Future Ordinance (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) entered in the register kept by the Company pursuant to section 352 of the SFO, or (iii) notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transaction by Directors of Listed Issuers, were as follows:

		Number and
		class of
	Capacity/	securities	Percentage of
Name of Director	Nature of interests	interested	shareholding
Mr. Tung Chi Fung	Beneficiary of a trust	560,601,960 (L)(Note 2)	56.64%
(“Mr. Tung”)(Note 1)	and settlor of
	a discretionary trust
Mr. Chen Jen-Tse	Beneficial owner	581,000 (L)(Note 2)	0.06%
	Share option	1,700,000(Note 3)	0.17%
Mr. Lo Wai Hung	Beneficial owner	360,000 (L)(Note 2)	0.04%
Mr. Loo Yau Soon	Share option	300,000(Note 3)	0.03%
Mr. Fong Heng Boo	Share option	300,000(Note 3)	0.03%

Notes:

• (1) Wisdom Cosmos, a company incorporated in the BVI, is the beneficial owner of 560,601,960 shares of the Company, representing approximately 56.64% shareholding interests in the Company. The entire issued share capital of Wisdom Cosmos is owned by Eander, a company incorporated in the BVI, which is in turn wholly owned by TMF Trust, trustee of the PJ Trust, an irrevocable reserved power trust established by Mr. Tung. Mr. Tung and his family members are the beneficiaries of the PJ Trust. Under the SFO, Mr. Tung, TMF Trust and Eander are deemed to be interested in all the shares of the Company registered in the name of Wisdom Cosmos.

• (2) The letter “L” denotes the entity/person’s long position in the Shares.

• (3) This refers to the number of underlying Shares covered by its share option scheme.

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APPENDIX II

GENERAL INFORMATION

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors or chief executive of the Company or their associates (as defined in the Listing Rules) had any interests and short positions in any shares, underlying shares or debentures of the Company or any 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 Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which each of them has taken or deemed to have taken under the provisions of the SFO); or which were required, pursuant to section 352 of the SFO, to be entered into the register referred to therein; or which were required, pursuant to provisions set out in Appendix 10 of the Listing Rules, to be notified to the Company and the Stock Exchange.

The register of substantial Shareholders maintained by the Company pursuant to Section 336 of the SFO (including interests filed with the Stock Exchange) shows that as at the Latest Practicable Date, the following persons (other than the Directors and the chief executive) had the following interests and short positions (if any) in the Shares and underlying Shares:

		Number of
		Shares/	Percentage of
	Capacity/	underlying	issued share
Name of Shareholder	Nature of interests	Shares held(Note 1)	capital
TMF Trust(Note 2)	Trustee	560,601,960 (L)	56.64%
Eander(Note 2)	Interest in a controlled	560,601,960 (L)	56.64%
	corporation
Wisdom Cosmos(Note 2)	Beneficial owner	560,601,960 (L)	56.64%
Wuxi Communications(Note 3)	Interest in a controlled	61,363,500 (L)	6.20%
	corporation
Xitong International	Beneficial owner	61,363,500 (L)	6.20%
Holdings (HK)
Limited (“Xitong”)(Note 3)

Notes:

• (1) The letter “L” denotes the entity/person’s long position in the Shares.

• (2) Wisdom Cosmos, a company incorporated in the BVI, is the beneficial owner of 560,601,960 shares of the Company, representing approximately 56.64% shareholding interests in the Company. The entire issued share capital of Wisdom Cosmos is owned by Eander, a company incorporated in the BVI, which is in turn wholly owned by TMF Trust, trustee of the PJ Trust, an irrevocable reserved power trust established by Mr. Tung. Mr. Tung and his family members are the beneficiaries of the PJ Trust. Under the SFO, Mr. Tung, TMF Trust and Eander are deemed to be interested in all the shares of the Company registered in the name of Wisdom Cosmos.

• (3) Xitong, a company incorporated in Hong Kong SAR, is the beneficial owner of 61,363,500 shares of the Company, representing approximately 6.20% shareholding interests in the Company. The entire issued share capital of Xitong is owned by Wuxi Communications, a company incorporated in the PRC, which is in turn wholly owned by State-owned Assets Supervision and Administration Commission of Wuxi Municipal People’s Government. Under the SFO, Wuxi Communications and Xitong are deemed to be interested in all the shares of the Company registered in the name of Xitong.

Save as disclosed above, the Company had not been notified of any other relevant interests or short positions in the issued share capital of the Company as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX II

3. ARRANGEMENTS AND MATTERS CONCERNING DIRECTORS

• (a) None of the Directors has entered or proposed to enter into any service contract with the Group, which is not expiring or determinable by the Group within one year without payment of compensation (other than the payment of statutory compensation).

• (b) As at the Latest Practicable Date, none of the Directors was interested, directly or indirectly, in any assets which, since 31 December 2022, being the date to which the latest published audited consolidated financial statements of the Group were made up, had been 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.

• (c) As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement subsisting at the Latest Practicable Date and entered into by the Group since 31 December 2022, being the date to which the latest published audited consolidated financial statements of the Group were made up, and which was significant in relation to the business of the Group.

• (d) As at the Latest Practicable Date, none of the Directors or their respective close associates had any interest in a business which competed or might compete either directly or indirectly, with the business of the Company.

4. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or claims of material importance nor was any litigation or claims of material importance known to the Directors to be pending or threatened against any member of the Group.

5. MISCELLANEOUS

• (a) The company secretary of the Company is Mr. Wang Zheng, an associate of The Chartered Governance Institute (formerly known as The Institute of Chartered Secretaries and Administrators) and The Hong Kong Chartered Governance Institute (formerly known as The Hong Kong Institute of Chartered Secretaries).

• (b) The registered office of the Company is at Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands. The headquarters and principal place of business in the Mainland China of the Company are at 10/F and 18/F, Kerry Plaza, Tower 2, 1-1 Zhong Xin No. 4 Road Futian, Shenzhen 518048, PRC and its principal place of business in Hong Kong SAR is at Room 4202, 42/F, Tower 1, Lippo Centre, 89 Queensway, Admiralty, Hong Kong SAR. The Hong Kong share registrar and transfer office of the Company is at Tricor Investor Services Limited, 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong SAR.

• (c) In the event of any inconsistency, the English text of this circular shall prevail over the Chinese text.

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GENERAL INFORMATION

APPENDIX II

6. MATERIAL CONTRACTS

The Group has entered into the following material contracts (not being a contract entered into in the ordinary course of business) within the two years immediately preceding the date of this circular and up to the Latest Practicable Date:

• (a) the Agreements; and

• (b) the two acquisition agreements dated 29 November 2021 entered into between Sheng Ye Digital Technology (Wuxi) Co., Ltd ( 盛業數字科技（無錫）有限公司 ) (“ Sheng Ye Digital Technology ”) (an indirect wholly-owned subsidiary of the Company) and Wuxi Tonghui (whose beneficial owner is State-owned Assets Supervision and Administration Commission of Wuxi Municipal People’s Government) in relation to the acquisition of 40% of the equity interests in Wuxi Guojin Factoring Limited (無錫國金商業保理有限公司), with a consideration of RMB360 million passing from Sheng Ye Digital Technology to Wuxi Tonghui.

7. DOCUMENTS ON DISPLAY

Copies of the following documents will be published on the website of the Stock Exchange at (www.hkexnews.hk) and the website of the Company (www.syholdings.com) from the date of this circular for 14 Business Days (both days inclusive):

• (a) the material contracts referred to in the paragraph headed “6. Material Contracts” in this appendix; and

• (b) this circular.

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