Synagistics Limited — Capital/Financing Update 2017

Jan 13, 2017

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

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any Shares.

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OP FINANCIAL INVESTMENTS LIMITED 東英金融投資有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1140)

ISSUE OF UNLISTED WARRANTS UNDER GENERAL MANDATE

Pursuant to the Consultancy Agreement entered into between the Company and the Consultant on 13 January 2017 (after trading hours), the Company has agreed to grant Warrants to the Consultant to subscribe for an aggregate of 202,553,560 Shares at the Subscription Price of HK$2.20 per Share in consideration of the services provided by the Consultant.

The Warrant Shares will be issued under the General Mandate granted to the Directors at the annual general meeting on 31 August 2016 and the issue of the Warrant Shares will not be subject to the approval by the Shareholders.

Application will be made to the Stock Exchange for the listing of and permission to deal in the Warrant Shares. No listing of the Warrants will be sought on the Stock Exchange or other stock exchange.

Shareholders and potential investors should note that the issue of Warrants is subject to the fulfillment of the condition(s) under the Consultancy Agreement. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

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CONSULTANCY AGREEMENT

The Directors are pleased to announce that on 13 January 2017 (after trading hours), the Company entered into the Consultancy Agreement with the Consultant. The Consultancy Agreement has the same principal terms which are set out as follows:

Date

13 January 2017

Parties

• (1) the Company; and

• (2) the Consultant

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, the Consultant and its ultimate beneficial owner(s) are third parties independent of and not connected with the Company and its connected persons (as defined in the Listing Rules).

Consultancy Services to be Provided

Pursuant to the Consultancy Agreement, the Consultant shall assist the Company to acquire investment opportunities, to achieve investments and earn gains on investments (“ Target Investments ”).

Number of Warrants and Warrant Shares

Pursuant to the Consultancy Agreement, the Company agreed to grant the Consultant a total of 202,553,560 Warrants for 202,553,560 Warrant Shares on Completion. Each Warrant carries the right to subscribe for one Warrant Share. The Warrants will rank pari passu in all respects among themselves.

Number of Warrant Shares Issuable

As at the date of this announcement, the Company has a total of 1,897,396,000 Shares in issue. Assuming there is no further issue or repurchase of the Shares and there is no adjustment to the Subscription Price, upon exercise in full of the subscription rights attaching to the Warrants, a maximum of 202,553,560 Warrant Shares with an aggregate nominal value of HK$20,255,356 will be allotted and issued, representing approximately 10.68% of the issued share capital of the Company as at the date of this announcement and approximately 9.65% of the issued share capital of the Company as enlarged by the Warrant Shares.

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Term

The term of the consultancy service will be from the date of the issue of the Warrants to the date of expiry of the fifth full financial year since the date of the Consultancy Agreement.

The term of the Warrants will be from the date of the issue of the Warrants to the date of expiry of one month after the announcement of the annual report of the fifth full financial year.

Subscription Price

The Subscription Price is HK$2.20 per Warrant Share, subject to adjustment, represents:

• (i) a premium of approximately 9.45% over the closing price of HK$2.01 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (ii) a premium of approximately 6.59% over the average of the closing price of Shares as quoted on the Stock Exchange for the last five consecutive trading days prior to the Last Trading Day of approximately HK$2.064; and

• (iii) a premium of approximately 3.48% over the average of the closing price of Shares as quoted on the Stock Exchange for the last ten consecutive trading days prior to the Last Trading Day of approximately HK$2.126.

The Subscription Price shall be subject to adjustments, proportionally, in the events of share consolidation or subdivision of Shares by the Company (if any).

The Subscription Price will be paid to the Company upon exercise of the Warrant.

The issue of Warrants and the Subscription Price are determined between the Company and the Consultant with reference to:–

• (i) No immediate cash payment will be made by the Company in compensating the Consultant for the provision of the Consultancy Services;

• (ii) The Warrants are not listed and thus there is virtually no liquid market for the Consultant to benefit from disposing of the Warrants;

• (iii) The price of Share is at a high level since 1 October 2015;

• (iv) The Subscription Price is well above the closing price on the Last Trading Day;

• (v) The closing price on the Last Trading Day is well above the net asset value of approximately HK$1.43 per Share as at 31 December 2016; and

• (vi) The exercise of the subscription rights attaching to the Warrants is subject to performance results of the Consultant’s services.

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Based on the above, the Directors are of the opinion that the issue of Warrants and Subscription Price are fair and reasonable. The Directors further consider that the purpose of compensating the Consultant in the form of the Warrants is to put the interests of the Consultant in line with the future share price performance of the Company, which, to a certain extent, ties up with the quality and successfulness of the Target Investments from the Consultant. Accordingly, the Directors consider that the terms of the Consultancy Agreement and the Warrants are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Requirements of Exercise

The Consultant may exercise the Warrant rights to subscribe for Warrant Shares as follows:

• (a) 20% of the total Warrants can be exercised upon 38% investment return rate and RMB200,000,000 return of investment on the Target Investments during each full financial year (excluding the financial year during which the Warrants is granted, same as below);

• (b) all outstanding Warrants can be exercised upon an aggregate RMB1,000,000,00 return of investment on Target Investments during the term of the Consultancy Agreement.

The Consultant should exercise its Warrants within one month from the date of announcement of the annual report evidencing the satisfaction of the requirements.

Conditions Precedent of Warrants

Completion of the Warrants is subject to the fulfillment of the following conditions:

• (i) if required, the Listing Committee having approved the issue of the Warrants either unconditionally or subject to such conditions to which both the Company and Consultant shall reasonably accept;

• (ii) the Listing Committee having granted the listing of, and permission to deal in, the Warrant Shares either unconditionally or subject to such conditions to which both the Company and the Consultant shall reasonably accept, and such permission and listing not subsequently being revoked or withdrawn prior to Completion;

• (iii) the Company having obtained, without prejudice to conditions (i) and (ii) above, all necessary consent and approval in respect of the issue of the Warrants.

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Nullification

The outstanding Warrants will be null if

• (a) the Company achieves no investment with the Consultant’s assistance by the end of the first full financial year after the Warrants are granted; or

• (b) the valid period of the Warrants expires.

Application for Listing

Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Warrant Shares which may fall to be allotted and issued upon exercise of the subscription rights attaching to the Warrants. No listing of the Warrants will be sought on the Stock Exchange or other stock exchange.

Ranking of the Warrant Shares

The Warrant Shares, when issued and fully paid, will rank pari passu in all respects with the existing issued Shares as at the date of allotment.

Transferability

The Warrants are not transferrable.

Voting Rights of the Warrants

The holder of the Warrants will not have any right to attend or vote at any meeting of the Company by virtue of them being the holders of the Warrants. The holder of the Warrants shall not have the right to participate in any distributions and/or offers of further securities made by the Company.

GENERAL MANDATE TO ISSUE THE WARRANT SHARES

The issue of the Warrant Shares upon exercise of the subscription rights attaching to the Warrants is not subject to the Shareholders’ approval.

The Warrant Shares will be issued pursuant to the General Mandate. The maximum number of new Shares which could be issued under the General Mandate is 368,279,200 Shares. The 202,553,560 Warrant Shares, to be allotted and issued upon full exercise of the subscription rights attaching to the Warrants, will utilize approximately 55% of the General Mandate.

As at the date of this announcement, save for the proposed issue of the Warrant Shares upon exercise of the subscription rights attaching to the Warrants, the Company has utilized approximately 15.2% of the General Mandate.

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REASONS FOR AND BENEFIT FROM THE CONSULTANCY AGREEMENT

The Company is principally engaged in investment in a diversified portfolio of global investments in listed and unlisted enterprises thereby to achieve earnings in the form of medium to long term capital appreciation.

The Consultant is owned by Mr. Liu Yu and Mr. Liu Yi, who are also its directors. Mr. Liu Yu is the founder and chairman of Hangzhou (China) Magsun Investment Co., Ltd. (“ Magsun ”) and Mr. Liu Yi is the co-founding partner & president of Magsun. Magsuna has an excellent management team which is specializing in strategic streamlining the companies in traditional industry and reforming their working process through the application of internet instruments, which will substantially increase their operation efficiency. Magsun’s achievements included its strategic participation in the development of a number of the listed companies that involved in various industrial chains and, with such listed companies as the market leaders, completed the overall planning of industrial chain upgrade by way of consolidation, merge and acquisition, fund incubation, internet upgrade for traditional businesses

One of the current focused areas for investment of the Company is industries whose efficiency can be greatly improved by the use of Internet technology. The Company has been strengthening its capability in direct investment resolutions and striving to initiate indepth cooperation with more industry leaders. The Directors believes that leveraging on the experience and expertise of the Consultants’ core management team and the services provided by Magopt, the Company will be able to identify the growth potential in traditional industries from the perspective of emerging industries, thus able to grasp favorable investment opportunities. Such investments made by the Company will contribute to the increment in value of invested companies, as well as generating positive the investment returns for the Company. As such, each of investing parties involved will be benefited from the win-win scenario so created.

The Warrants and the attached subscription rights are based on performance results of the Consultant’s services. The purpose of compensating the Consultant in the form of the Warrants is to put the interests of the Consultant in line with the future share price performance of the Company, which, to a certain extent, ties up with the quality and successfulness of the Target Investments from the Consultant.

The Directors consider that the Consultancy Agreement was entered into on normal commercial terms after arm’s length negotiations between the Company and the Consultant and that the terms of the Consultancy Agreement is fair and reasonable so far as the interests of the Company and its Shareholders as a whole are concerned.

USE OF PROCEEDS

Assuming the full exercise of the subscription rights attaching to the Warrants at the Subscription Price, it is expected that an additional gross amount of HK$446 million will be raised. The net proceeds (after deduction of all related expenses) of approximately HK$446 million will be used as the general working capital of the Company and for future investment pursuant to the investment objectives of the Company.

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FUND RAISING ACTIVITIES DURING THE PAST TWELVE MONTHS

The Company has conducted the following fund raising activity in the past twelve months from the date of this announcement:

Date(s) of	Fund raising	Net proceeds	Intended use of	Actual use of
announcement(s)	activity	raised	proceeds	proceeds
12 December 2016,	Placing of 56,000,000	Approximately	For the general	The net proceeds are
29 December 2016,	new Shares under	HK$107,016,000	working capital of	kept with a bank as
5 January 2017 and	General Mandate at		the Company	deposit
12 January 2017	HK$1.95 per Share

The Company confirms that all funds raised from the fund-raising activity mentioned above will be applied as intended.

Save as disclosed above, there has been no other fund-raising activities conducted by the Company during the past twelve months immediately prior to the date of this announcement.

CHANGES IN THE SHAREHOLDING STRUCTURE OF THE COMPANY

As at the date of this announcement, the Company has 1,897,396,000 Shares in issue. The shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately after the full exercise of the subscription rights attaching to the Warrants (assuming that there will be no further changes in the issued share capital of the Company prior to such exercise and no adjustment to the Subscription Price) are as follows:

Oriental Patron Financial Group Limited (“OPFGL”)(Note 2) Liu Zhiwei_(Note 3) Bestone Asset Management Co., Ltd (“Bestone Asset Management”)(Note 4) Yang Fuyi Grand Link Finance Limited (“GLFL”)(Note 5)_ Geng Shuanghua Consultant Public Shareholders Total	As at the date of this announcement No. of Shares Approximate % 359,800,000 18.96 182,330,000 9.61 170,000,000 8.96 163,574,500 8.62 158,244,000 8.34 106,100,000 5.59 – – 757,347,500 39.92 1,897,396,000 100.00	Immediately after the full exercise of the subscription rights attaching to the Warrants (Note 1) No. of Shares Approximate % 359,800,000 17.13 182,330,000 8.68 170,000,000 8.10 163,574,500 7.79 158,244,000 7.54 106,100,000 5.05 202,553,560 9.65 757,347,500 36.06 2,099,949,560 100.00

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Notes:

1. Assuming there is no change in the issued share capital of the Company from the date of this announcement up to the date of allotment and issue of Warrant Shares.

2. This represented an aggregate of 330,000,000 Shares held by Ottness Investments Limited (“ OIL ”) and 29,800,000 Shares held by Oriental Patron Financial Services Group Limited (“ OPFSGL ”). OIL is a wholly owned subsidiary of OPFGL, while 95% of the issued share capital of OPFSGL is owned by OPFGL. The issued share capital of OPFGL is beneficially owned as to 51% by Mr. Zhang Zhi Ping and 49% by Mr. Zhang Gaobo. By virtue of the SFO, each of Mr. Zhang Zhi Ping and Mr. Zhang Gaobo is deemed to be interested in the Shares and underlying Shares of the Company held by OIL and OPFSGL.

3. An executive Director and the president of the Company.

4. This represented 170,000,000 Shares held by Bestone Asset Management. Ms. Wang Juan (“ Ms. Wang ”) owns 100% of the issued share capital in 21st Century Champion Limited (“ 21st Century Champion ”) while 21st Century Champion owns 100% of the issued share capital in Bestone Asset Management. By virtue of the SFO, each of Ms. Wang and 21st Century Champion is deemed to be interested in the Shares held by Bestone Asset Management.

5. This represented 158,244,000 Shares held by GLFL. Mr. Wang Delian (“ Mr. Wang ”) owns 100% of the issued share capital in GLFL. By virtue of the SFO, Mr. Wang is deemed to be interested in the Shares held by GLFL.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions shall have the following respective meanings:

“Company” OP Financial Investments Limited, a company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on the Stock Exchange

• “Completion” Completion of grant of Warrants

• “connected person(s)” has the meaning ascribed to it under the Listing Rules

• “Consultancy Agreement” the service agreement dated 13 January 2017 entered into between the Company and the Consultant in respect of the consultancy service

• “Consultant” Magopt Ltd, a company incorporated in the British Virgin Islands with limited liability and the holder of the Warrants

• “Director(s)” the directors of the Company

“General Mandate” the general mandate granted to the Directors by the resolution of the Shareholders passed at the annual general meeting of the Company held on 31 August 2016

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

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“Last Trading Day” 13 January 2017, being the last trading day of the Shares on which the Consultancy Agreement was entered into “Listing Committee” the Listing Committee of the Stock Exchange “Listing Rules” the Rules Governing the Listing of Securities on the Main Board of The Exchange “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Shareholder(s)” holder(s) of the issued Share(s) “Share(s)” Ordinary shares with nominal value of HK$0.10 each in the share capital of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subscription Price” HK$2.20 (subject to adjustment), being the subscription price per Warrant Share at which the holder of each Warrant may subscribe for the Warrant Shares

“Target Investments” Investments the Company acquired with the Consultant’s assistance, which should be subject to the confirmation of the Company and the Consultant “Warrant(s)” a total of 202,553,560 unlisted warrants to be issued by the Company at the Subscription Price, each conferring rights entitling its holder(s) to subscribe for up to 202,553,560 Warrant Shares at the Subscription Price

“Warrant Shares” Shares for which the Consultant can subscribe under the Warrants

By order of the Board OP Financial Investments Limited Zhang Gaobo Executive Director & CEO

Hong Kong, 13 January 2017

As at the date of this announcement, the Board comprises three executive Directors, namely, Mr. Zhang Zhi Ping, Mr. Zhang Gaobo and Dr. Liu Zhiwei; three independent non-executive Directors, namely, Mr. Kwong Che Keung, Gordon, Professor He Jia and Mr. Wang Xiaojun.

• For identification purposes only

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