Synagistics Limited — Capital/Financing Update 2022

Jun 27, 2022

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 securities of the Company.

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WEALTHKING INVESTMENTS LIMITED 華 科 資 本 有 限 公 司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1140)

(1) SUBSCRIPTION OF NEW SHARES UNDER GENERAL MANDATE; AND

(2) CHANGE IN USE OF PROCEEDS FROM PREVIOUS SUBSCRIPTIONS

(1) SUBSCRIPTION OF NEW SHARES UNDER GENERAL MANDATE

On 27 June 2022 (after trading hours), the Company and the Subscriber entered into the Subscription Agreement, pursuant to which the Company has conditionally agreed to allot and issue and the Subscriber (for itself or its nominee as the subscriber) has conditionally agreed to subscribe for 812,263,200 new Shares at the Subscription Price of HK$0.50 per Subscription Share.

The Subscription Shares represent (i) approximately 11.26% of the issued share capital of the Company as at the date of this announcement; and (ii) approximately 10.12% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares (assuming there will be no change in the total number of issued Shares of the Company between the date of this announcement and the allotment and issue of the Subscription Shares.)

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The Subscription Price is fixed at HK$0.50 per Subscription Share, which represents:

• (i) a premium of approximately 6.38% to the closing price per Share of HK$0.47 as quoted on the Stock Exchange on 27 June 2022, being the date of the Subscription Agreement;

• (ii) a premium of approximately 4.82% to the average closing price per Share of HK$0.477 as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Subscription Agreement;

• (iii) a premium of approximately 2.46% to the average closing price per Share of HK$0.488 as quoted on the Stock Exchange for the last ten consecutive trading days immediately preceding the date of the Subscription Agreement; and

• (iv) a discount of approximately 56.18% over the unaudited net asset value per Share of approximately HK$1.141 per Share as at 31 May 2022, with reference to the announcement of the Company dated 15 June 2022 in relation to the net asset value of the Company.

The gross proceeds from the Subscription will be HK$406,131,600 and the net proceeds after deducting relevant expenses are expected to be approximately HK$406,000,000. The net proceeds from the Subscription will be used for future investment pursuant to the investment objectives of the Company.

The Subscription Shares will be allotted and issued under the New General Mandate granted to the Directors at the EGM.

Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

Completion of the Subscription is subject to fulfillment (or waiver, if applicable) of the conditions precedent in the Subscription Agreement and the Subscription may or not may proceed. Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

(2) CHANGE IN USE OF PROCEEDS FROM PREVIOUS SUBSCRIPTIONS

Reference is made to the announcement and circular of the Company dated 31 December 2021 and 2 March 2022 in relation to, among other things, the Previous Subscriptions respectively. The Board announces that the Company shall change the allocation of the use of proceeds from Previous Subscriptions.

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(1) SUBSCRIPTION OF NEW SHARES UNDER GENERAL MANDATE

On 27 June 2022 (after trading hours), the Company and the Subscriber entered into the Subscription Agreement, pursuant to which the Company has conditionally agreed to allot and issue and the Subscriber (for itself or its nominee as the subscriber) has conditionally agreed to subscribe for 812,263,200 new Shares at the Subscription Price of HK$0.50 per Subscription Share.

THE SUBSCRIPTION AGREEMENT

The principal terms of the Subscription Agreement are set out below.

Date

27 June 2022 (after trading hours)

Parties

• (i) the Company (as issuer); and

• (ii) the Subscriber.

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Subscriber (a professional investor within the meaning of section 6 of the Securities and Futures (Professional Investor) Rules (Cap. 571D)) and its ultimate beneficial owner are third parties independent of the Company and its connected persons (as defined in the Listing Rules).

The Subscription Shares

The Subscription Shares represent (i) approximately 11.26% of the issued share capital of the Company as at the date of this announcement; and (ii) approximately 10.12% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares (assuming there will be no change in the total number of issued Shares of the Company between the date of this announcement and the allotment and issue of the Subscription Shares.)

The Subscription Shares have an aggregate nominal value of HK$81,226,320.

The Subscription Price

The Subscription Price is fixed at HK$0.50 per Subscription Share, which represents:

• (i) a premium of approximately 6.38% to the closing price per Share of HK$0.47 as quoted on the Stock Exchange on 27 June 2022, being the date of the Subscription Agreement;

• (ii) a premium of approximately 4.82% to the average closing price per Share of HK$0.477 as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Subscription Agreement;

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• (iii) a premium of approximately 2.46% to the average closing price per Share of HK$0.488 as quoted on the Stock Exchange for the last ten consecutive trading days immediately preceding the date of the Subscription Agreement; and

• (iv) a discount of approximately 56.18% over the unaudited net asset value per Share of approximately HK$1.141 per Share as at 31 May 2022, with reference to the announcement of the Company dated 15 June 2022 in relation to the net asset value of the Company.

The net Subscription Price, after deduction of all relevant fees and expenses, is estimated to be approximately HK$0.50 per Subscription Share.

The Subscription Price was arrived at an arm ’ s length negotiations between the Company and the Subscriber with reference to the recent trading performance of the Shares, the business prospects and financial position of the Group and the current market conditions.

The Directors (including the independent non-executive Directors) consider that the terms of the Subscription Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

Conditions precedent to the Completion of Subscription

Completion of the Subscription under the Subscription Agreement is conditional upon fulfillment of the following conditions:

• (a) the Listing Committee of the Stock Exchange having granted the listing of, and permission to deal in, the Subscription Shares and the Listing Committee of the Stock Exchange not having withdrawn or revoked such listing and permission on or before the Completion;

• (b) the Shares remaining listed and traded on the Main Board of the Stock Exchange at all times from the date of the Subscription Agreement to the date of the Completion, save for any temporary trading halt or suspension in trading for no longer than three (3) consecutive trading days (or such longer period as the Subscriber may agree in writing), and there being no indication from the Stock Exchange that the listing of the Shares on the Stock Exchange will be suspended, revoked or withdrawn at any time before or after the Completion, whether in connection with any of the transactions contemplated by the Subscription Agreement or otherwise;

• (c) the Company ’ s representations, warranties and undertakings under the Subscription Agreement remaining true, complete and accurate and not misleading at the Completion as if repeated at the Completion and at all times between the date of the Subscription Agreement and the Completion;

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• (d) the Company having obtained from or made to (as the case may be) all relevant authorities all applicable approvals and filings in connection with the Subscription;

• (e) the Company having duly performed and observed all of the obligations, undertakings, covenants and agreements required to be performed and observed by it prior to the Completion under the Subscription Agreement;

• (f) the Subscriber having been reasonably satisfied with the results of the business, commercial, legal and financial due diligence on the Group in the Subscriber ’ s sole discretion; and

• (g) the Subscriber ’ s representations, warranties and undertakings under the Subscription Agreement remaining true, complete and accurate in all material respects and not misleading in any material respect at the date of the Completion as if repeated at the date of the Completion and at all times between the date of the Subscription Agreement and the date of the Completion.

Condition (a) above is not waivable by any party of the Subscription Agreement. Conditions (b) to (f) can be waived by Subscriber at any time before Completion by notice in writing to the Company. Condition (g) can be waived by the Company at any time before Completion by notice in writing to the Subscriber.

If the above conditions are not fulfilled (or waiver, if appliable) on or prior to 20 July 2022 or such later date which may be agreed by the Company and the Subscriber, the Subscription Agreement shall terminate and neither of the parties will have any claim against each other save for any liability arising out of any antecedent breach of the Subscription Agreement.

Completion of the Subscription

Completion will take place within 14 business days immediately after all the conditions of the Subscription are fulfilled or waived (or such other date as the Company and the Subscriber may agree in writing).

Completion of the Subscription is subject to fulfillment (or waiver, if applicable) of the conditions precedent in the Subscription Agreement and the Subscription may or not may proceed. Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

Ranking of the Subscription Shares

The Subscription Shares, when allotted and issued, will rank pari passu in all respects with the existing Shares in issue at the date of allotment and issue of the Subscription Shares.

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General Mandate

The Subscription Shares will be allotted and issued under the New General Mandate granted to the Directors at the EGM. At the EGM, the total number of Shares in issue was 4,061,316,000 Shares. Accordingly, the maximum number of new Shares which can be issued pursuant to the New General Mandate is 812,263,200 Shares (representing 20% of the issued share capital of the Company as at the date of the EGM), which has not been utilized since the date of the EGM. The issue of the Subscription Shares pursuant to the New General Mandate is not subject to the approval of the Shareholders. After Completion, there is no outstanding Share which may be allotted and issued pursuant to the New General Mandate.

Application for listing

Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

INFORMATION ON THE COMPANY AND THE SUBSCRIBER

The Company is a company incorporated in the Cayman Islands with limited liability. The Group is principally engaged in investment in a diversified portfolio of investments in listed and unlisted enterprises thereby to achieve earnings in the form of medium to long term capital appreciation.

The Subscriber is a company incorporated in the British Virgin Islands with limited liability and is an investment holding company. The ultimate beneficial owner of the Subscriber is Mr. Chen Jiabin who is a businessman, and owns and manages a financial investment firm in Hong Kong. Upon completion of the Subscription, the Subscriber and its ultimate beneficial owner (namely, Mr. Chen Jiabin) will become substantial shareholders of the Company and hence, connected persons of the Company.

REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS

The Company is an investment company listed on the Stock Exchange under Chapter 21 of the Listing Rules, and it devotes to capture valuable investment opportunities in order to enhance the Company ’ s profitability and create value for Shareholders. Having considered that the business and financial activities in China are now restoring gradually in this year and there is a potential rebounce of growth in economy, the Company is cautiously optimistic on and prospects of the securities and investment markets in China.

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After the Company has obtained the approvals for the Previous Subscriptions and the New General Mandate at the EGM and during the course of preparing the investment plans for using the proceeds from the Previous Subscriptions, the Group has identified more investment opportunities and decided to grasp these potential investment projects after conducting due diligence. The Board is of the view that the fund raised from the Subscription enables the Group to capture these potential investment opportunities and enhance the profitability of the Company. In addition, the Subscription can enhance the capital and shareholders ’ base of the Company for long-term development and further strengthen its financial position. The Directors (including the independent non-executive Directors) consider the terms of the Subscription Agreement to be fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

Upon Completion, the aggregate gross proceeds of the Subscription will amount to HK$406,131,600 and the aggregate net proceeds, after the deduction of all relevant fees and expenses, will be approximately HK$406,000,000, representing a net Subscription Price of approximately HK$0.50 per Subscription Share.

All net proceeds from the Subscription will be used to capture potential investment opportunities in line with the Group ’ s investment strategy, which is comprised of three pillars, namely (i) core-holding-centered private equity investment as long-term investment, (ii) portfolio management as mid- to long-term investments, and (iii) trading and others as short-term investments.

As of the date of this announcement, the Group has identified certain investment opportunities in the sectors such as environment and industrials, technology, media and telecom and debt, bonds and funds and other Instruments. These potential investment opportunities are long-term core investments in companies and midor short-term investments in the secondary market and debt market which are expected to contribute midand short-term returns to the Group. It is expected that the proceeds from the Subscription will be utilised by December of 2022.

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FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST 12 MONTHS

The following is the equity fund raising activities conducted by the Company in the past 12 months immediately preceding the date of this announcement:

				Actual use of the net
		Proposed use of the net		proceeds as of the date
Event and Date	Net proceeds raised	proceeds		of this announcement
	(approximately)
Issue and allotment of	HK$1,499 million	(i)	approximately 90% of the	Used as intended
3,152,173,913 Shares			net proceeds will be used
on 30 May 2022			to capture potential
(date of announcement:			investment opportunities
31 December 2021)			in accordance with the
			Group’s investment
			strategy
		(ii) approximately 10% of the		Please refer to the
			net proceeds will be used	section ‘‘Change in use
			for general working	of Proceeds from
			capital of the Group,	Previous Subscriptions’’
			such as staff cost and	in this announcement
			office rent
Issue and allotment of	HK$359.66 million	For future investment		Used as intended
580,188,000 Shares
on 25 November 2021
(date of announcement:
26 October 2021)
Issue and allotment of	HK$382.87 million	As general working capital		Used as intended
580,188,000 Shares			and for future investment
on 3 September 2021
(date of announcement:
13 August 2021)

Save as disclosed above, the Company has not conducted any equity fund raising activity within the 12-month period prior to the date of this announcement.

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EFFECT ON SHAREHOLDING STRUCTURE

As at the date of this announcement, the Company has 7,213,489,913 Shares in issue. Table below sets out the shareholding structure of the Company (i) as at the date of this announcement and (ii) immediately after Completion of the Subscription:

Name of Shareholder Dr. Liu and his associates (Note 1) Bright Victory International Limited Subscriber Public Shareholders Total:	As at the date of this announcement No. of Shares Approximate % 1,961,259,130 27.19 1,442,260,870 19.99 0 0.00 3,809,969,913 52.82 7,213,489,913 100.00	As at the date of this announcement No. of Shares Approximate % 1,961,259,130 27.19 1,442,260,870 19.99 0 0.00 3,809,969,913 52.82 7,213,489,913 100.00	Immediately after Completion of Subscription No. of Shares Approximate % 1,961,259,130 24.44 1,442,260,870 17.97 812,263,200 10.12 3,809,969,913 47.47 8,025,753,113 100.00	Immediately after Completion of Subscription No. of Shares Approximate % 1,961,259,130 24.44 1,442,260,870 17.97 812,263,200 10.12 3,809,969,913 47.47 8,025,753,113 100.00
	0 3,809,969,913	0.00 52.82	812,263,200 3,809,969,913	10.12 47.47
	7,213,489,913	100.00	8,025,753,113	100.00

Notes:

1. Dr. Liu is a connected person of the Company by virtue of him being an executive Director.

(2) CHANGE IN USE OF PROCEEDS FROM PREVIOUS SUBSCRIPTIONS

Reference is made to the Previous Subscriptions Announcement and Circular. Unless otherwise defined, capitalised terms used in this announcement shall have the same meanings as defined in the Previous Subscriptions Announcement and Circular.

The net proceeds raised from the Previous Subscriptions was approximately HK$1,499 million (the ‘‘ Net Proceeds ’’ ). As at the date of this announcement, the Company had utilised approximately HK$1,350 million and the remaining unutilised net proceeds amounted to approximately HK$149 million (the ‘‘ Unutilised Net Proceeds ’’ ). The Board has resolved to change the use of the Unutilised Net Proceeds as follows:

Planned used of Net Proceeds For future investment in accordance with the Group’s investment strategy For general working capital Total	Amount of planned use of New Proceeds Approximately HK$ million 1,350 149 1,499	Amount of utilised Net Proceeds up to the date of this announcement Approximately HK$ million 1,350 — 1,350	Unutilised Net Proceeds up to the date of this announcement Approximately HK$ million — 149 149	Revised allocation of the Unutilised Net Proceeds Approximately HK$ million 149 —
				149

The Unutilised Net Proceeds are expected to be utilised by end of September 2022.

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REASONS FOR AND BENEFITS OF THE CHANGE IN USE OF PROCEEDS

As disclosed in the Previous Subscriptions Announcement and Circular, it is expected to use approximately 10% of the Net Proceeds for general working capital of the Group, such as staff cost and office rent. In view of the identification of more investment opportunities as aforesaid, the Directors consider that to reallocate the Unutilised Net Proceeds to capture those investment opportunities will further enhance the profitability of the Company.

Save as disclosed above, there was no other change in the use of proceeds from Previous Subscriptions. The Board considers that such change in the use of proceeds will not have any material adverse impact on the Group ’ s current financial position. The Board also considers that such arrangement is in line with the business development of the Group in view of the current economic and market condition and is in the interests of the Company and the shareholders of the Company as a whole.

DEFINITIONS

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

‘‘Board’’	the board of Directors
‘‘Company’’	Wealthking Investments Limited, a company incorporated in
	the Cayman Islands with limited liability, the Shares of
	which are listed on the Stock Exchange
‘‘Completion’’	completion of the Subscription in accordance with the terms
	of the Subscription Agreement
‘‘connected person(s)’’	has the meaning as ascribed to it under the Listing Rules
‘‘Director(s)’’	the director(s) of the Company
‘‘EGM’’	the extraordinary general meeting of the Company held on
	22 March 2022 in which the Shareholders had approved,
	among other matters, the grant of the New General Mandate
‘‘Group’’	collectively, the Company and its subsidiaries from time to
	time
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’	the Hong Kong Special Administrative Region of the PRC
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock
	Exchange

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• ‘‘ New General Mandate ’’

• the general mandate of the Company granted to the Directors by way of passing an ordinary resolution at the EGM to, inter alia, allot, issue and deal with new Shares not exceeding 20% of the aggregate number of the issued Shares as at the date of the EGM, pursuant to which a maximum of 812,263,200 Shares may fall to be allotted and issued as at the date of this announcement

• ‘‘ Previous Subscriptions ’’

• the subscription for a total of 1,630,434,783 Shares at a price of HK$0.92 per share by two subscribers pursuant to the two subscription agreements dated 31 December 2021 as disclosed in the Previous Subscriptions Announcement and Circular

• ‘‘ Previous Subscriptions Announcement and Circular ’’

• the announcement and the circular of the Company dated 31 December 2021 and 2 March 2022 respectively in relation to, among other things, the Previous Subscriptions

• ‘‘ Share(s) ’’

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

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

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

• ‘‘ Subscriber ’’

• Hong Sheng Universe Limited, a company incorporated in the British Virgin Islands with limited liability

• ‘‘ Subscription ’’

• subscription of Subscription Shares by the Subscriber at the Subscription Price pursuant to the Subscription Agreement

• ‘‘ Subscription Agreement ’’

• the subscription agreement dated 27 June 2022 entered into between the Company and Subscriber in respect of the Subscription

• ‘‘ Subscription Price ’’ the subscription price of HK$0.50 per Subscription Share

• ‘‘ Subscription Shares ’’ a total of 812,263,200 new Shares to be allotted and issued by the Company to the Subscriber under the Subscription Agreement

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‘‘ substantial shareholder(s) ’’

has the meaning as ascribed to it under the Listing Rules

‘‘ % ’’

per cent.

By order of the Board Wealthking Investments Limited Liu Zhiwei Executive Director and Chairman

Hong Kong SAR, 27 June 2022

As at the date of this announcement, the Board comprises one executive Director, namely, Dr. Liu Zhiwei; two non-executive Directors, namely Dr. Fu Weigang and Dr. Wang Shibin; and three independent non-executive Directors, namely, Mr. Chen Yuming, Mr. Yan Xiaotian and Mr. Zhao Kai.

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