Television Broadcasts Limited — Proxy Solicitation & Information Statement 2017

Dec 19, 2017

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 China Fortune Financial Group Limited (the ‘‘Company’’), you should at once hand this circular accompanying with the form of proxy to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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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China Fortune Financial Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 290)

Website: http://www.290.com.hk

(1) MAJOR TRANSACTION: ESTABLISHMENT OF JOINT VENTURE COMPANY AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the EGM of the Company to be held at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong, on Wednesday, 10 January 2018, at 10: 00 a.m. is set out on pages 26 to 28 of this circular.

Whether or not you intend to attend and vote in person at the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F., Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong as soon as possible but in any event not later than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof (as the case may be) should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

20 December 2017

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Appendix I	— Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Appendix II	— General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		26

– i –

DEFINITIONS

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

‘‘associate(s)’’ has the meaning ascribed to it under the Listing Rules ‘‘Beijing Hongtai’’ Beijing Hongtai Tongchuang Investment Management Co., Ltd. (北京洪泰同創投資管理有限公司), one of the JV Partners ‘‘Beijing Beijing JinXiuHuaCheng Investment Co., Ltd. (北京錦綉華成投 JinXiuHuaCheng’’ 資有限公司), one of the JV Partners ‘‘Board’’ the board of Directors ‘‘Business Day(s)’’ any day (excluding Saturday, Sunday or public holiday) on which licensed banks in Hong Kong are generally open for business in Hong Kong ‘‘Cinda Subscription the subscription agreement dated 22 November 2016 entered into Agreement’’ between the Company and Mankind Investment Limited in relation to the subscription of the 3-year 2% coupon convertible bonds in the principal amount of HK$110,754,000 ‘‘connected person(s)’’ as the meaning ascribed to it under the Listing Rules ‘‘CSRC’’ the China Securities Regulatory Commission ‘‘Director(s)’’ the director(s) of the Company

• ‘‘EGM’’ an extraordinary general meeting to be held by the Company to consider and, if thought fit, approve (among other things) the Subscription Agreement and the transactions contemplated thereunder

• ‘‘Former Subscription the subscription agreement dated 23 January 2017 entered into Agreement’’ among the JV Partners in relation to the establishment of the JV Company

• ‘‘Fortune Securities’’ Fortune (HK) Securities Limited, a wholly-owned subsidiary of the Company and one of the JV Partners

• ‘‘Gongqing City Gongqing City Huiquan Investment Management Partnership Huiquan’’ (Limited Partnership)* (共青城滙泉投資管理合夥企業（有限合 夥）), one of the JV Partners

• ‘‘Group’’ the Company and its subsidiaries from time to time ‘‘Hong Kong’’ Hong Kong Special Administrative Region of the PRC

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

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DEFINITIONS

• ‘‘JV Company’’ HuaHai Securities Company Limited (華海證券股份有限公司), a company limited by shares to be established under the laws of the PRC pursuant to the New Subscription Agreement

• ‘‘JV Partners’’ Fortune Securities, Qingdao Ruiyuan, Beijing JinXiuHuaCheng, Qingdao New Energy, Beijing Hongtai and Gongqing City Huiquan

• ‘‘Latest Practicable 15 December 2017, being the latest practicable date prior to the Date’’ printing of this circular for ascertaining certain information in this circular

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• ‘‘New Subscription the subscription agreement dated 9 November 2017 entered into Agreement’’ among the JV Partners in relation to the establishment of the JV Company

• ‘‘PRC’’ the People’s Republic of China, and for the purpose of this circular only, excluding Hong Kong, the Macau Special Administrative Region and Taiwan

• ‘‘Qingdao New Energy’’ Qingdao New Energy Solutions Inc.* (青島昌盛日電太陽能科技 股份有限公司), one of the JV Partners

• ‘‘Qingdao Ruiyuan’’ Qingdao Ruiyuan Engineering Group Ltd.* (青島瑞源工程集團 有限公司), one of the JV Partners

• ‘‘Riverhead the subscription agreement dated 22 November 2016 entered into Subscription between the Company and Riverhead Capital (International) Agreement’’ Management Co., Ltd. in relation to the subscription of the 3- year 2% coupon convertible bonds in the principal amount of HK$305,661,000

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

• ‘‘SFC’’ the Securities and Futures Commission

• ‘‘SFO’’

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended from time to time

• ‘‘Share(s)’’ ordinary share(s) of HK$0.01 each in the issued share capital of the Company

• ‘‘Shareholder(s)’’

• holder(s) of the Shares

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

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DEFINITIONS

• ‘‘Supplemental Agreement’’

• the supplemental agreement dated 22 November 2016 entered into between the Company and Pacific Alliance Limited in relation to the subscription of convertible bonds in the principal amount of HK$153,585,000

• ‘‘Takeovers Code’’

the Codes on Takeovers and Mergers and Share Buy-backs

• ‘‘Termination’’ the termination of the Former Subscription Agreement and the transactions contemplated thereunder

• ‘‘Total Investment Amount’’

• the total aggregate investment amount of all due parties to the New Subscription Agreement in respect of the establishment of the JV Company as set out in the New Subscription Agreement

• ‘‘USD’’ United States dollars, the lawful currency of the United States of America

• ‘‘%’’ percentage

For illustrative purpose only, amount denominated in RMB has been translated into HK$ at the rate of RMB1.00 = HK$1.174 and amount denominated in USD has been translated into HK$ at the rate of USD1.00 = HK$7.836 in this circular. No representation is made that any amount in RMB or USD or HK$ has been, could have been or could be converted at the above rate or any other.

• for identification purpose only

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LETTER FROM THE BOARD

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China Fortune Financial Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 290)

Website: http://www.290.com.hk

Executive Directors: Mr. XIE Zhichun (Chairman) Mr. HAN Hanting Mr. LIU Yinan

Registered Office: P.O. Box 309, Ugland House Grand Cayman, KY1-1104 Cayman Islands

Non-executive Directors:

Mr. TANG Baoqi Mr. WU Ling Mr. HUA Yang

Independent Non-executive Directors:

Mr. CHAN Kin Sang

Mr. NG Kay Kwok

Mr. CHIU Kung Chik

Mr. LI Gaofeng

20 December 2017

To the Shareholders,

Dear Sir or Madam,

(1) MAJOR TRANSACTION: ESTABLISHMENT OF JOINT VENTURE COMPANY AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 9 November 2017 in relation to, among others, the establishment of the JV Company. On 9 November 2017 (after trading hours), Fortune Securities, a wholly-owned subsidiary of the Company, entered into the New Subscription Agreement with Qingdao Ruiyuan, Beijing JinXiuHuaCheng, Qingdao New Energy, Beijing Hongtai and Gongqing City Huiquan in relation to the establishment of the JV Company. The New Subscription Agreement will

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LETTER FROM THE BOARD

become effective upon, among other things, the Company having obtained the approval and authorisation from the Shareholders in relation to the New Subscription Agreement and the transactions contemplated thereunder. The establishment of the JV Company is subject to, among other things, the JV Company obtaining the requisite approvals from relevant regulatory authorities.

The purpose of this circular is to provide you with, among other things, (i) further information on the New Subscription Agreement; and (ii) the notice of EGM.

THE NEW SUBSCRIPTION AGREEMENT

Principal terms of the New Subscription Agreement are set out below:

Date: 9 November 2017 Parties: (1) Fortune Securities; (2) Qingdao Ruiyuan; (3) Beijing JinXiuHuaCheng; (4) Qingdao New Energy; (5) Beijing Hongtai; and (6) Gongqing City Huiquan.

Shareholding Structure and Capital Contribution

Pursuant to the New Subscription Agreement, the parties agreed, among other things, that:

• (i) the Total Investment Amount for the establishment of the JV Company shall be RMB1,000 million (equivalent to approximately HK$1,174 million), which is subject to the approval by relevant regulatory authorities, shall be contributed by Fortune Securities, Qingdao Ruiyuan, Beijing JinXiuHuaCheng, Qingdao New Energy,Beijing Hongtai and Gongqing City Huiquan, in the amount of RMB300 million (equivalent to approximately HK$352 million), RMB325 million (equivalent to approximately HK$382 million), RMB236 million (equivalent to approximately HK$277 million), RMB50 million (equivalent to approximately HK$59 million), RMB49 million (equivalent to approximately HK$58 million) and RMB40 million (equivalent to approximately HK$47 million), respectively. The JV Company will be held as to 30.0%, 32.5%, 23.6%, 5.0%, 4.9% and 4.0% shareholding by the JV Partners, respectively;

• (ii) each of the JV Partners shall fully pay their respective capital contribution amounts within six months after the document on approving the establishment of the JV Company is signed and issued by the CSRC; and

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LETTER FROM THE BOARD

• (iii) subject to the JV Company obtaining the requisite approvals from relevant regulatory authorities, the JV Company is expected to become a full-licensed securities company permitted to conduct securities brokerage, proprietary securities trading, underwriting and sponsorship in securities, and securities and assets management businesses in the PRC.

The respective amounts of capital contributions of the JV Partners were determined after arm’s length negotiation among the parties to the New Subscription Agreement with reference to the initial capital requirement of the JV Company and the capital contribution intentions of the parties. Fortune Securities’ capital contribution of RMB300 million (equivalent to approximately HK$352 million) will be funded by internal resources and/or borrowings of the Group including but not limited to the two-year term loan facility which confers the Company to an unconditional and irrevocable cash loan of HK$800 million at an interest rate of 6% per annum available for drawdown within a specified period not less than 24 months conditioning on several fulfilments pursuant to the loan agreement entered into between the Company and China Cinda (HK) Asset Management Co., Limited, details of which are set out in the circular of the Company dated 13 December 2016.

Conditions Precedent

The New Subscription Agreement will become effective upon:

• (i) the JV Partners having obtained necessary authorised internal approvals and the Company having obtained the approval and authorisation from the Shareholders in relation to the New Subscription Agreement and the transactions contemplated thereunder; and

• (ii) where applicable, the JV Partners having obtained the approval and authorisation from the relevant regulatory authorities in relation to the New Subscription Agreement and the transactions contemplated thereunder.

Restrictions on Transfer of Shares of the JV Company

Each of the JV Partners shall not:

• (i) transfer any part of the shares of the JV Company within 48 months from the date of establishment of the JV Company; and

• (ii) transfer any part of the shares of the JV Company, which are issued prior to the public offering of the shares of the JV Company, within one year from the day the shares of the JV Company are listed on any recognised stock exchange.

Boards of Directors and Supervisors of the JV Company

The board of directors of the JV Company shall consist of nine directors (including three independent directors). Pursuant to the New Subscription Agreement, each of Fortune Securities, Qingdao Ruiyuan and Beijing JinXiuHuaCheng is entitled to nominate two directors and recommend a candidate of independent director. The chairman of the

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LETTER FROM THE BOARD

board of directors of the JV Company shall be a director nominated by Qingdao Ruiyuan. The JV Company shall in each year hold at least two board of directors’ meetings. Each director of the JV Company is entitled to one vote for every board resolution. All board resolutions shall be passed by a simple majority of votes.

JV Company shall have a board of supervisors which shall consist of three supervisors. Pursuant to the New Subscription Agreement, each of Fortune Securities and Qingdao Ruiyuan is entitled to nominate one supervisor and the remaining supervisor shall be an employee of the JV Company who is being elected at the JV Company’s employees’ representatives conference. The chairman of the board of supervisors of the JV Company shall be the supervisor nominated by Fortune Securities. The JV Company shall hold at least one board of supervisors’ meeting in every six months. Each supervisor of the JV Company is entitled to one vote for every matter that is decided by the board of supervisors. Any action or resolution of the board of supervisors shall be passed by a simple majority of votes.

Shareholders’ Meeting and Voting

A regular shareholders’ meeting of the JV Company shall be held within six months after the end of each financial year.

Save as below matters which shall be approved by special resolution at the shareholders’ meeting of the JV Company, all matters shall be approved by ordinary resolution(s) at the shareholders’ meeting of the JV Company:

• (i) increase or decrease in the registered capital of the JV Company;

• (ii) spin off, merging, winding up and liquidation or change in the form of the JV Company;

• (iii) amendment to the article of association of the JV Company; or

• (iv) other matters as prescribed by applicable laws and regulations and article of association of the JV Company.

An ordinary resolution shall be passed by a simple majority of votes of the shareholders (including their proxies) who present at the shareholders’ meeting of the JV Company and a special resolution shall be passed by a majority of more than two-thirds of votes of the shareholders (including their proxies) who present at the shareholders’ meeting of the JV Company.

Profit Distribution

Profit after tax of the JV Company shall be distributed in the following order:

• (i) offset loss of the JV Company incurred in previous financial year;

• (ii) 10% of the profit after tax of the JV Company shall be deducted and credited to the statutory provident fund;

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LETTER FROM THE BOARD

• (iii) deduction of trading risk reserve and other risk reserve as required by applicable laws of the PRC and regulation of the CSRC;

• (iv) deduction of discretionary provident fund in accordance with resolution approved at the shareholders’ meeting of the JV Company; and

• (v) unless required by relevant applicable laws and regulation, all remaining profit after (i) to (iv) above shall be distributed to shareholders of the JV Company as dividend upon having obtained approval at the shareholders’ meeting of the JV Company.

Any deduction of profit to the statutory provident fund can be withheld once the accumulated statutory provident fund exceeds 50% of the registered capital of the JV Company.

REASONS FOR AND BENEFITS OF THE ESTABLISHMENT OF THE JV COMPANY

The Group and its management keep putting extra effort in developing the securities business and strive to gain further exposure in the capital markets of the PRC so as to bring better returns to the stakeholders.

On 23 January 2017, Fortune Securities entered into the Former Subscription Agreement with Qingdao Ruiyuan, Gongqing City Huiquan, Beijing JinXiuHuaCheng, Qingdao New Energy and Beijing Hongtai, in relation to the establishment of the joint venture company in the PRC. Pursuant to the Former Subscription Agreement, the capital commitment of Fortune Securities was RMB300 million (equivalent to approximately HK$352 million). Please refer to the announcement of the Company dated 23 January 2017 and circular of the Company dated 22 February 2017 for full details of the transaction contemplated under the Former Subscription Agreement. The entering into of the Former Subscription Agreement and the transactions contemplated thereunder were approved by the shareholders of the Company on 10 March 2017.

The parties to the Former Subscription Agreement submitted the application to the CSRC for the establishment and regulatory licenses of the joint venture company to be established under the Former Subscription Agreement in January 2017. Up to the date of the Termination, there was no material progress in relation to the aforementioned application

On 9 November 2017, due to a change in the shareholding structure of the joint venture company to be established under the Former Subscription Agreement, it is mutually agreed among the parties to the Former Subscription Agreement that a new subscription agreement regarding the establishment of a joint venture securities company in the PRC will be entered into among the parties to the Former Subscription Agreement. To the best of the Directors’ knowledge and belief, the aforementioned proposed change in shareholding structure of the JV Company was due to an internal restructuring of one of the JV Partners. As far as the Company is concerned, the parties to the Former Subscription Agreement shall not be liable for any breach of contract resulting from the Termination.

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LETTER FROM THE BOARD

Notwithstanding the Termination, it is the intention of the JV Partners to re-submit the application to relevant regulatory authorities for the establishment of the JV Company under new shareholding structure, which will become a full-licensed securities company permitted to conduct securities brokerage, proprietary securities trading, underwriting and sponsorship in securities, and securities and assets management businesses in the PRC.

By entering into the New Subscription Agreement and committing resource towards the establishment of the JV Company on the terms of the New Subscription Agreement, the JV Partners are expecting to rely on Supplement X of the ‘‘Mainland and Hong Kong Closer Economic Partnership Arrangement’’ (CEPA), pursuant to which Hong Kongfunded financial institutions which satisfy the requirements for establishing foreigninvested securities companies may set up one full-licensed joint venture securities company in specified areas in accordance with relevant requirements. The JV Partners, following execution of the New Subscription Agreement, will re-submit applications, together with the New Subscription Agreement and the relevant articles of association of the JV Company, shortly to the CSRC for the establishment and regulatory licenses of the JV Company.

The Group believes its participation in the establishment and operation of the JV Company shall enable the Group to expand its securities services businesses into the PRC and bring along synergy effect to the existing securities services and financial businesses platform of the Group. It also offers significant competitive advantages to the Group in accessing the fast growing financial markets in the PRC.

The Directors (including the independent non-executive Directors) consider that the investment in the JV Company by Fortune Securities and the terms of the New Subscription Agreement are fair and reasonable, on normal commercial terms and are in the interest of the Company and its Shareholders as a whole.

INFORMATION ON THE GROUP, THE JV COMPANY AND THE JV PARTNERS

The Company is an investment holding company and its subsidiaries are principally engaged in the provision of brokerage and margin financing, proprietary securities trading, corporate finance, money lending and factoring and consultancy and insurance brokerage services.

The JV Company is proposed to be set up in Shandong province, the PRC. The JV Company, when established, will be a company in the PRC limited by shares, which be owned as to 30.0% by Fortune Securities, 32.5% by Qingdao Ruiyuan, 23.6% by Beijing JinXiuHuaCheng, 5.0% by Qingdao New Energy, 4.9% by Beijing Hongtai and 4.0% by Gongqing City Huiquan. The proposed principal activities of the JV Company shall include provision of regulated securities related services including securities brokerage, proprietary securities trading, underwriting and sponsorship in securities, securities and assets management and any other business approved by the CSRC. The parties may from time to time, by way of board resolutions of the JV Company and subject to the regulations by the applicable authorities, take all necessary actions or obtain the necessary approvals or licenses to expand the authorised business scope of the JV Company.

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LETTER FROM THE BOARD

Pursuant to the New Subscription Agreement, it was agreed that business operation period of the JV Company shall be perpetual after the business license is granted by the relevant regulatory authorities in the PRC.

Fortune Securities is a limited liability company incorporated in Hong Kong and is an indirectly wholly-owned subsidiary of the Company. Fortune Securities is principally engaged in the provision of securities brokering and dealing, margin financing to clients and placing and underwriting services in Hong Kong. Fortune Securities is licensed to carry on Type 1 (dealing in securities) regulated activity under the SFO.

Qingdao Ruiyuan is a limited liability company established in the PRC which is a conglomerate engaging in, among others, real estate development, technology businesses and health and elderly care services.

Beijing JinXiuHuaCheng is a limited liability company established in the PRC which principally engages in investments.

Qingdao New Energy is a limited liability company established in the PRC which is a comprehensive solar energy utilisation solution service provider.

Beijing Hongtai is a limited liability company established in the PRC which is a fund management company.

Gongqing City Huiquan is a limited partnership established in the PRC which principally engages in investments.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, as at the Latest Practicable Date, each of Qingdao Ruiyuan, Beijing JinXiuHuaCheng, Qingdao New Energy, Beijing Hongtai and Gongqing City Huiquan and their respective ultimate beneficial owner(s) is third party independent of and not connected with the Company and its connected persons as defined under the Listing Rules.

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LETTER FROM THE BOARD

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Save for the following equity fund raising activities, the Company did not carry out any equity fund raising activities during the past 12 months prior to the Latest Practicable Date:

					Actual use of proceeds as at
Date of Announcement	Fund raising activity	Net proceeds	Intended use of proceeds		the Latest Practicable Date
22 November 2016	Issue of convertible	Approximately	(i)	approximately	Convertible bonds in an
	bonds	HK$565,000,000		HK$240,000,000 for the	aggregate principal
				injection of capital to a	amount of
				wholly-owned	HK$120,000,000 has yet
				subsidiary of the	to be issued. Among the
				Company and	net proceeds of
				expanding its margin	HK$445,000,000
				financing and	received by the
				underwriting businesses;	Company from the issue
					of convertible bonds, (i)
			(ii)	approximately	approximately
				HK$150,000,000 for	HK$130,000,000 has
				expanding money	been used for the
				lending business of the	injection of capital to a
				Group;	wholly-owned subsidiary
					of the Company and
			(iii)	approximately HK$12,000,000 for engaging in private equity investments;	expanding its margin financing and underwriting businesses; (ii) approximately HK$50,000,000 has been
					used for expanding the
			(iv)	approximately	money lending business
				HK$129,000,000 for	of the Group; (iii)
				strengthening the	approximately
				capital base of asset	HK$30,600,000 has been
				management, wealth	used for strengthening
				management and	the capital base of the
				corporate financing	asset management,
				business of the Group;	wealth management and
				and	corporate financing
					business of the Group;
			(v)	approximately	and (iv) approximately
				HK$34,000,000 for the	HK$34,000,000 has been
				general working capital	used for the general
				of the Group.	working capital of the
					Group. The remaining
					balance was maintained
					at bank.

27	June 2016	Issue of convertible	Approximately	Settlement of previous debt	Used as intended
		bonds	HK$32,000,000	owed to the subscriber of
				relevant convertible bonds
18	March 2016	Issue of convertible	Approximately	Settlement of previous debt	Used as intended
		bonds	HK$40,000,000	owed to the subscriber of
				relevant convertible bonds

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LETTER FROM THE BOARD

FINANCIAL EFFECTS OF THE ESTABLISHMENT OF THE JV COMPANY

The capital contribution is expected to be funded by internal financial resources and/or borrowings of the Group.

By adopting equity accounting method and assuming (i) such capital contribution is solely funded by the Group’s internal financial resources, the investment in joint ventures of the Group will be increased by RMB300 million (equivalent to approximately HK$352 million) and the cash and bank balances of the Group will be decreased by the same amount; and (ii) such capital contribution is solely funded by borrowings of the Group, the investment in joint ventures of the Group will be increased by RMB300 million (equivalent to approximately HK$352 million) and the total liabilities of the Group will be increased by the same amount. Accordingly, the investment in the JV Company is not expected to have material adverse effects on the position of net assets of the Group.

Upon the establishment of the JV Company, the Group will adopt equity accounting method to account for 30% of the net financial results of the JV Company. The impact on the earnings of the Group would depend on the future financial performance of the JV Company.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios as set out in Rule 14.07 of the Listing Rules in relation to the capital commitment of Fortune Securities under the New Subscription Agreement is more than 25% but all of the applicable percentage ratios are less than 100%, the entering into of the New Subscription Agreement and the transactions contemplated thereunder constitute a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements.

To the best of the Directors’ information, knowledge and belief having made all reasonable enquiries, as at the Latest Practicable Date, no Shareholder had any material interest in the New Subscription Agreement and the transactions contemplated thereunder that is materially different from other Shareholders. Therefore, no Shareholder, or his close associate(s), is required to abstain from voting on the resolution to be proposed at the EGM.

EGM

The Company will convene an EGM for the Shareholders to consider and, if thought fit, approve by way of poll, the New Subscription Agreement and the transactions contemplated thereunder. A notice convening the EGM to be held at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong on Wednesday, 10 January 2018 at 10: 00 a.m. is set out on pages 26 to 28 of this circular.

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LETTER FROM THE BOARD

Whether or not you are able to attend and vote at the EGM in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F., Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from subsequently attending and voting in person at the EGM or any adjournment thereof (as the case may be) should you so wish.

RECORD DATE FOR EGM

In order to determine the eligibility of the Shareholders to attend and vote at the EGM which is scheduled to be held on 10 January 2018, all duly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited, at Suites 3301– 04, 33/F., Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong for registration by no later than 4: 00 p.m. on 4 January 2018. Shareholders whose names are recorded in the register of members of the Company on 4 January 2018 are entitled to attend and vote at the EGM.

ADDITIONAL INFORMATION

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

RECOMMENDATION

The Directors are of the view that the terms of New Subscription Agreement are on normal commercial terms which are fair and reasonable and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole and, therefore, recommend the Shareholders to vote in favour of the relevant resolution to be proposed at the EGM to approve the New Subscription Agreement and the transactions contemplated thereunder.

By Order of the Board China Fortune Financial Group Limited XIE Zhichun Chairman and Executive Director

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. THREE-YEAR AUDITED FINANCIAL INFORMATION

The audited consolidated financial statements of the Group for the years ended 31 March 2015, 2016 and 2017 together with the relevant notes thereto can be found from pages 43 to 137 of the annual report of the Company for the year ended 31 March 2015 published on 10 July 2015, pages 45 to 133 of the annual report of the Company for the year ended 31 March 2016 published on 26 July 2016 and pages 58 to 139 of the annual report of the Company for the year ended 31 March 2017 published on 26 July 2017.

The said annual reports of the Company are available on the Company’s website at www.290.com.hk and the website of the Stock Exchange at www.hkexnews.hk.

2. INDEBTEDNESS STATEMENT

As at 31 October 2017, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the total indebtedness of the Group was as follows:

Borrowings

The Group had outstanding corporate bonds with carrying amounts of approximately HK$166.7 million, and convertible bonds with liability component of approximately HK$213.4 million and equity component of approximately HK$66.8 million. All borrowings of the Group are unsecured and not subject to any guarantee.

Contingent liabilities

The Group had no significant contingent liabilities.

Apart from as disclosed above and intra-group liabilities, as at 31 October 2017, the Group did not have any debt securities issued and outstanding, and authorised or otherwise created but unissued, and term loans, other borrowings or indebtedness in the nature of borrowing including bank overdrafts and liabilities under acceptance (other than normal trade bills) or acceptance credits or hire purchase commitments, mortgages, charges, contingent liabilities or guarantees.

3. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse changes in the financial or trading position or prospects of the Group since 31 March 2017, being the date to which the latest audited consolidated financial statements of the Group were made up, up to and including the Latest Practicable Date.

– 14 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

4. WORKING CAPITAL

The Directors are of the opinion that, in the absence of unforeseeable circumstances, assuming the completion of the establishment of the JV Company, and taking into account the internal financial resources and borrowings of the Group, the Group will have sufficient working capital for its present requirements and the requirements for the next twelve months from the date of this circular.

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

In July 2017, when President Xi Jinping was visiting Hong Kong for the SAR’s 20th anniversary, he pointed out that it is equally important to develop the socialist Mainland China, and the capitalist Hong Kong. During the 19th National Congress of CPC held between October 18th to 24th in Beijing, General Secretary Xi said in his speech again that Hong Kong ‘‘shall share both the historic responsibility of national rejuvenation and the pride of a strong and prosperous China.’’

In recent years, we witnessed a number of central government’s beneficial policies towards Hong Kong: The infrastructure construction of Hong Kong-Zhuhai-Macau Bridge and the Guangzhou-Shenzhen high-speed railway; The open-up of cross-border financial and investment activities through Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, and Bond Connect; the Belt & Road Initiative and the Asian Infrastructure Investment Bank, to name but a few. Hong Kong now has strong and wellrounded support from the central government in trade, finance, infrastructure, tourism, etc. Hong Kong is closely partnering with Mainland China to form regional partnerships and explore the global market, and has embarked on a broad path of complementarity, common development and sharing of achievements.

The report delivered during the 19th CPC National Congress has made clear for Hong Kong that both sides will focus on collaborations, especially those under the frameworks of Guangdong-Hong Kong-Macau Greater Bay area and the Pan-Pearl River area. The sustained fast growth of China as a whole has paved the way for Hong Kong and provided unprecedented opportunities.

The Company will not stand on the sidelines at this special historic moment in the Chinese history. We will tap into the potential opportunities brought by the opening-up policies including the Guangdong-Hong Kong-Macau Greater Bay area, the ShanghaiHong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect, and Bond Connect, etc. We will be honest, proactive, cooperative, and innovative; to create value for our clients and shareholders; and to draw a bright future for the Company and our people.

During the current financial year, the Group is principally engaged in the provision of brokerage and margin financing, proprietary securities trading, corporate finance, money lending and consultancy and insurance brokerage services.

As disclosed in 2017 annual report of the Company, revenue of the Group amounted to approximately HK$49.9 million for the year ended 31 March 2017. Net profit of the Group amounted to approximately HK$30.9 million for the year ended 31 March 2017. Total

– 15 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

assets and total equity amounted to approximately HK$988.8 million and approximately HK$277.7 million, respectively. The Group will focus on securities market in Hong Kong as well as expanding its margin financing and underwriting businesses. Furthermore, the Group will continue to invest more funds on its existing money lending business, asset management business, wealth management business and corporate financing business.

The formation of joint venture through Supplement X of the ‘‘Mainland and Hong Kong Closer Economic Partnership Arrangement’’ (CEPA) with other joint venture partners shall enable the Group to explore potential opportunities to develop its existing securities services business in the financial market in the PRC so as to enhance values to the Shareholders. The Directors believe that the development does bring along synergy effect to the existing securities services and financial businesses platform of the Group. It also enhances the Group’s service capability in the fast-growing financial market in the PRC, hence strengthening the Group’s competitive advantage as a whole.

– 16 –

APPENDIX II

GENERAL INFORMATION

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 aspects and not misleading or deceptive, and there is no other matter the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

Interests of Directors and Chief Executive in the Company

Long position

					Approximate
					percentage of the
				Total interest in	issued share
		Interest in	Interest in	Shares/underlying	capital of the
Name of Director	Capacity	Shares	underlying shares	shares	Company
Mr. XIE Zhichun	Interest of	2,094,350,000	3,000,000,000	5,094,350,000	71.89%
(‘‘Mr. Xie’’)(Note)	controlled
	corporation

Note: As at the Latest Practicable Date, Mr. Xie was deemed to be interested in 2,094,350,000 Shares held by Riverhead Capital (International) Management Co., Ltd. (‘‘Riverhead Capital’’, a company which was owned as to 80% by Mr. Xie) and 3,000,000,000 underlying shares of the Company which may be issued upon the exercise of the conversion rights attaching to the convertible bonds (at the conversion price of HK$0.06 per conversion share) (i) in the principal amount of HK$60,000,000 issued by the Company to Riverhead Capital on 28 June 2017 and (ii) in the principal amount of HK$120,000,000 to be issued by the Company to Riverhead Capital pursuant to the subscription agreement entered into between the Company and Riverhead Capital on 22 November 2016.

Save as disclosed above, as at the Latest Practicable Date, none of the Director and chief executive of the Company had or was deemed to have any interests or short positions in the Shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO) or were required, pursuant to section 352 of the SFO, to be entered in the register referred therein; or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock Exchange.

– 17 –

APPENDIX II

GENERAL INFORMATION

Interests of substantial Shareholders

As at the Latest Practicable Date, so far as is known to the Directors, the following substantial Shareholders (other than a Director or the chief executive of the Company) had, or were deemed to have, interests or short positions in the Shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or which were required pursuant to section 336 of the SFO, to be entered into the registered referred to therein, or who are, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company or any other member of the Group:

Long position

					Approximate
					percentage of
				Total interest	the issued
			Interest in	in Shares/	share capital
		Interest in	underlying	underlying	of the
Name of Shareholder(s)	Capacity	Shares	shares	shares	Company
Riverhead	Beneficial	2,094,350,000	3,000,000,000	5,094,350,000	71.89%
Capital(Note 1)	owner
Jadehero Limited	Beneficial	800,000,000	—	800,000,000	11.29%
(‘‘Jadehero’’)(Note 2)	owner
Southlead Limited	Interest of	800,000,000	—	800,000,000	11.29%
(‘‘Southlead’’)(Note 2)	controlled
	corporation
Marvel Steed Limited	Interest of	800,000,000	—	800,000,000	11.29%
(‘‘Marvel	controlled
Steed’’)(Note 2)	corporation
Wahen Investments	Interest of	800,000,000	—	800,000,000	11.29%
Limited	controlled
(‘‘Wahen’’)(Note 2)	corporation
Mankind Investment	Beneficial	1,416,430,000	890,900,000	2,307,330,000	32.56%
Limited	owner
(‘‘MIL’’)(Note 3)
China Cinda (HK)	Interest of	1,416,430,000	890,900,000	2,307,330,000	32.56%
Asset Management	controlled
Co., Limited	corporation
(‘‘China Cinda
(HK)’’)(Note 3)

– 18 –

APPENDIX II

GENERAL INFORMATION

					Approximate
					percentage of
				Total interest	the issued
			Interest in	in Shares/	share capital
		Interest in	underlying	underlying	of the
Name of Shareholder(s)	Capacity	Shares	shares	shares	Company
China Cinda (HK)	Interest of	1,416,430,000	890,900,000	2,307,330,000	32.56%
Holdings Company	controlled
Limited (‘‘China	corporation
Cinda
Holdings’’)(Note 3)
China Cinda Asset	Interest of	1,416,430,000	890,900,000	2,307,330,000	32.56%
Management Co.,	controlled
Limited (‘‘China	corporation
Cinda Asset’’)(Note 3)
Pacific Alliance	Beneficial	—	2,559,750,000	2,559,750,000	36.12%
Limited	owner
(‘‘PAL’’)(Note 4)
Best Fortress Limited	Interest of	—	2,559,750,000	2,559,750,000	36.12%
(‘‘BFL’’)(Note 4)	controlled
	corporation

Notes:

1. As at the Latest Practicable Date, Riverhead Capital beneficially held 2,094,350,000 Shares and 3,000,000,000 underlying shares of the Company. Riverhead Capital was owned as to 80% by Mr. Xie, the executive Director and chairman of the Company. For the purpose of SFO, Mr. Xie was deemed to be interested in the Shares and underlying shares held by Riverhead Capital. Mr. Xie was the sole director of Riverhead Capital as at the Latest Practicable Date.

2. As at the Latest Practicable Date, Jadehero beneficially held 800,000,000 Shares. Jadehero was owned as to 80% by Southlead and as to 20% by Marvel Steed. Southlead was wholly-owned by Wahen which in turn was wholly-owned by Mr. Zhao Xu Guang. Marvel Steed was whollyowned by Mr. Wong Kam Fat Tony. For the purpose of SFO, Southlead, Marvel Steed, Wahen, Mr. Zhao Xu Guang and Mr. Wong Kam Fat Tony were deemed to be interested in the Shares held by Jadehero.

3. As at the Latest Practicable Date, MIL beneficially held 1,416,430,000 Shares and 890,900,000 underlying shares of the Company, which may be issued upon the exercise of the conversion rights attaching to the convertible bonds in the outstanding principal amount of HK$53,454,000 (at the conversion price of HK$0.06 per conversion share) by the Company to MIL pursuant to the subscription agreement entered into between the Company and MIL on 22 November 2016. MIL was wholly-owned by China Cinda (HK) which in turn was wholly-owned by China Cinda Holdings. China Cinda Holdings was wholly-owned by China Cinda Asset. For the purpose of SFO, China Cinda (HK), China Cinda Holdings and China Cinda Asset were deemed to be interested in the Shares and underlying shares held by MIL. Mr. Tang Baoqi, a non-executive Director, was the director and deputy general manager of China Cinda Holdings as at the Latest Practicable Date.

– 19 –

GENERAL INFORMATION

APPENDIX II

1. As at the Latest Practicable Date, PAL beneficially held 2,559,750,000 underlying shares of the Company which may be issued upon the exercise of the conversion rights attaching to the convertible bonds in the principal amount of HK$153,585,000 (the ‘‘PAL Convertible Bonds’’) (at the conversion price of HK$0.06 per conversion share) by the Company to PAL pursuant to the Supplemental Agreement. PAL was wholly-owned by BFL which in turn was owned as to 90% by Mr. Yip Sum Yin. For the purpose of SFO, BFL and Mr. Yip Sum Yin were deemed to be interested in the underlying shares held by PAL.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any substantial Shareholders (who were not Directors or chief executive of the Company) who had an interest or short position in the Shares or underlying shares which would fall to be disclosed under Divisions 2 and 3 of Part XV of the SFO, or which would be required, pursuant to Section 336 of the SFO, to be entered in the register referred to therein.

Service Contracts

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

Other Interests of the Directors

As at the Latest Practicable Date, none of the Directors has any direct or indirect interests in any assets which have been acquired or disposed of by, or leased to, or are proposed to be acquired or disposed of by, or leased to, the Company or any of its subsidiaries since 31 March 2017, the date to which the latest published audited consolidated financial statements of the Company were made up.

As at the Latest Practicable Date, save for the interests of Mr. XIE Zhichun, being the chairman of the Board and an executive Director, and Mr. TANG Baoqi, being a non-executive Director, in the Riverhead Subscription Agreement, the Cinda Subscription Agreement and the subscription agreement dated 21 September 2016 entered into between the Company and PAL (as amended and supplemented by the Supplemental Agreement) and the transactions contemplated thereunder as Mr. Xie is the director and beneficial owner of Riverhead Capital and Mr. Tang’s directorship of the Company was nominated by China Cinda Asset, none of the Director was materially interested in any contract or arrangement which is significant in relation to the share capital and business of the Group. Please refer to the circular of the Company dated 13 December 2016 for details in relation to the Riverhead Subscription Agreement, the Cinda Subscription Agreement and the subscription agreement dated 21 September 2016 entered into between the Company and PAL (as amended and supplemented by the Supplemental Agreement) and transactions contemplated thereunder.

– 20 –

APPENDIX II

GENERAL INFORMATION

Competing Interests of the Directors

As at the Latest Practicable Date, the interest of the Directors in the business which compete or is likely to compete either directly or indirectly, with business of the Group (‘‘Competing Business’’) as required to be disclosed pursuant to the Listing Rules were as follows:

		Description of
Name of Director	Name of company	Competing Business	Nature of interest
XIE Zhichun	China Taiping Insurance	Fund and asset	As an independent
(Executive	Holdings Co. Ltd.	management	non-executive
Director)	(‘‘China Taiping’’)		director of China
			Taiping
	China Minsheng	Fund and asset	As an independent
	Banking Corp. Ltd.	management,	non-executive
	(‘‘China Minsheng’’)	securities dealing	director of China
		and broking,	Minsheng
		investment banking
HAN Hanting	Eternal Pearl Securities	Securities broking and	As a non-executive
(Executive	Ltd. (‘‘Eternal Pearl’’)	margin financing	director of Eternal
Director)			Pearl

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and his associates was interested directly or indirectly in any business, apart from his interest in the Company, which competes or is likely to compete with the business of the Group.

3. LITIGATION

The Group has no material litigation as at the Latest Practicable Date.

– 21 –

APPENDIX II

GENERAL INFORMATION

4. MATERIAL CONTRACTS

The following contract (not being a contract entered into in the ordinary course of business) had been entered into by members of the Group within two years immediately preceding the date of this circular which is or may be material:

	Agreement
	Date	Parties		Amount Involved	Summary
a)	9 November	1.	Fortune	Total investment	A subscription agreement was
	2017		Securities	amount of Fortune	entered into between Fortune
		2.	Qingdao	Securities is	Securities (the Company’s
			Ruiyuan	RMB300,000,000	wholly-owned subsidiary) and
		3.	Beijing	(equivalent to	the other five PRC companies
			JinXiuHuaCheng	approximately	for establishment of the JV
		4.	Qingdao New	HK$352,000,000)	Company in the PRC. The
			Energy		total investment amount of the
		5.	Beijing Hongtai		JV Company will be
		6.	Gongqing City		RMB1,000,000,000 (equivalent
			Huiquan		to approximately
					HK$1,174,000,000). Fortune
					Securities will hold 30%
					shareholding in the JV
					Company.

• Due to the subsequent change in the shareholdings of Beijing JinXiuHuaCheng and Gongqing City Huiquan in the JV Company, the JV Partners agreed to cancel the Former Subscription Agreement and entered into the New Subscription Agreement.

• b) 6 September Lender: Fortune Loan amount of A loan agreement was entered 2017 Finance Limited USD6,390,000 into between FFL (a wholly(‘‘FFL’’) (equivalent to owned subsidiary of the approximately Company) and SML in respect

• Borrower: Super HK$50,072,000) of the grant of a loan in the Millionplus Ltd. principal amount of (‘‘SML’’) USD6,390,000 (equivalent to approximately HK$50,072,000) by FFL.

• c) 27 March 2017 Lender: China Cinda Loan amount of (HK) HK$800,000,000

• Borrower: the Company

• A loan agreement was entered into between the Company and China Cinda (HK) in respect of the grant of loan in the principal amount of HK$800,000,000 to the Company.

– 22 –

GENERAL INFORMATION

APPENDIX II

	Agreement
	Date	Parties		Amount Involved	Summary
d)	23 January	1.	Fortune	Total investment	A subscription agreement was
	2017		Securities	amount of Fortune	entered into between Fortune
		2.	Qingdao	Securities is	Securities and the other five
			Ruiyuan	RMB300,000,000	PRC companies for
		3.	Beijing	(equivalent to	establishment of the JV
			JinXiuHuaCheng	approximately	Company in the PRC. The
		4.	Qingdao New	HK$352,000,000)	total investment amount of the
			Energy		JV Company will be
		5.	Beijing Hongtai		RMB1,000,000,000 (equivalent
		6.	Gongqing City		to approximately
			Huiquan		HK$1,174,000,000). Fortune
					Securities will hold 30%
					shareholding in the JV
					Company.
e)	28 November	Issuer: the Company		Not applicable	A supplemental agreement was
	2016				entered into between the
		Bondholder: Flying			Company and FBI (Ever Step
			Bridge Investment		(as defined hereinbelow) has
			Limited (‘‘FBI’’)		transferred the Relevant CB
					(as defined hereinbelow) to
					FBI on 10 June 2016) in
					relation to the amendment of
					the terms and conditions of the
					Relevant CB issued by the
					Company.
f)	22 November	Issuer: the Company		Convertible bonds in	A supplemental agreement was
	2016			the principal amount	entered into between the
		Subscriber: PAL		of HK$153,585,000	Company and PAL, pursuant
					to which the principal amount
					of the convertible bonds under
					the PAL Subscription
					Agreement (as defined
					hereinbelow) was revised from
					HK$390,000,000 to
					HK$153,585,000.
g)	22 November	Issuer: the Company		Convertible bonds in	A subscription agreement was
	2016			the total principal	entered into between the
		Subscriber:		amount of	Company and Riverhead
			Riverhead Capital	HK$305,661,000	Capital in relation to the
					subscription of the 3-year 2%
					coupon convertible bonds in
					the total principal amount
					HK$305,661,000.

– 23 –

APPENDIX II

GENERAL INFORMATION

	Agreement
	Date	Parties	Amount Involved	Summary
h)	22 November	Issuer: the Company	Convertible bonds in	A subscription agreement was
	2016		the principal amount	entered into between the
		Subscriber: MIL	of HK$110,754,000	Company and MIL in relation
				to the subscription of the 3-
				year 2% coupon convertible
				bonds in the principal amount
				HK$110,754,000.
i)	21 September	Issuer: the Company	Convertible bonds in	A subscription agreement was
	2016		the principal amount	entered into between the
		Subscriber: PAL	of HK$390,000,000	Company and PAL in relation
				to the subscription of the 3-
				year 2% coupon convertible
				bonds in the principal amount
				HK$390,000,000 (the ‘‘PAL
				Subscription Agreement’’).
j)	27 June 2016	Issuer:the Company	Convertible bonds in	A subscription agreement was
			the principal amount	entered into between the
		Subscriber:One	of HK$32,000,000	Company and One Express
		Express Group		Group in relation to the
		Limited (‘‘One		subscription of the 24-month
		Express Group’’)		5% convertible bonds in the
				principal amount of
				HK$32,000,000.
k)	3 June 2016	Vendor:Giant Talent	Total consideration of	A sale and purchase agreement
		Group Ltd. (‘‘Giant	HK$1,217,965	was entered into between
		Talent’’)		Giant Talent (a wholly-owned
				subsidiary of the Company)
		Purchaser:Ms.		and Ms. Kwong in relation to
		KWONG Mei Ling		the disposal of 25% interests in
		Merlin (‘‘Ms.		Prior Capital Limited and
		Kwong’’)		repayment of the profit
				shortfall guaranteed by Ms.
				Kwong to Giant Talent.
l)	31 March 2016	Vendor: Promiseasy	Consideration of	A sale and purchase agreement
		Limited	HK$73,000,000	was entered into between
		(‘‘Promiseasy’’)		Promiseasy (a wholly-owned
				subsidiary of the Company)
		Purchaser: Celestial		and CTL in relation to the
		Tycoon Limited		disposal of 35% interests in
		(‘‘CTL’’)		Measure Up International
				Limited.

– 24 –

GENERAL INFORMATION

APPENDIX II

Agreement Date Parties

Amount Involved

Summary

m) 18 March 2016 Issuer:the Company Subscriber:Ever Step Holdings Limited (‘‘Ever Step’’)

Convertible bonds in A subscription agreement was the principal amount entered into between the of HK$40,384,615 Company and Ever Step in relation to the subscription of the 12-month 12% convertible bonds in the principal amount of HK$40,384,615 (the ‘‘Relevant CB’’’) issued by the Company.

5. GENERAL

• (a) The company secretary of the Company is Ms. WONG Miu Ying Vivian. Ms. WONG Miu Ying Vivian is an associate member of both the Hong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries and Administrators in the United Kingdom.

• (b) The registered office of the Company is situated at P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

• (c) The branch share registrar of the Company in Hong Kong is Union Registrars Limited, located at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong.

• (d) In the event of inconsistency, the English text shall prevail over the Chinese text.

6. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9: 00 a.m. to 12: 30 p.m. and from 2: 00 p.m. to 5: 30 p.m. (other than Saturdays, Sundays and public holidays in Hong Kong) at the principal place of business of the Company at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong from the date of this circular up to and including the date of the EGM:

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

• (b) the annual reports of the Company for the two years ended 31 March 2016 and 31 March 2017;

• (c) the material contracts referred to under the section headed ‘‘Material Contracts’’ in this appendix; and

• (d) this circular.

– 25 –

NOTICE OF EGM

==> picture [73 x 73] intentionally omitted <==

China Fortune Financial Group Limited

(Incorporated in the Cayman Islands with limited liability) (Stock code: 290) Website: http://www.290.com.hk

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘EGM’’) of China Fortune Financial Group Limited (the ‘‘Company’’) will be held at 10: 00 a.m. on Wednesday, 10 January 2018 at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong for the purpose of considering, and if thought fit, passing with or without modifications, the following resolution of the Company:

ORDINARY RESOLUTION

1. ‘‘THAT:

2. (a) the subscription agreement dated 9 November 2017 entered into among Fortune (HK) Securities Limited, 青島瑞源工程集團有限公司 (transliterated as Qingdao Ruiyuan Engineering Group Ltd.), 北京錦綉華成投資有限公司 (transliterated as Beijing JinXiuHuaCheng Investment Co., Ltd.), 青島昌盛 日電太陽能科技股份有限公司 (transliterated as Qingdao New Energy Solutions Inc.), 北京洪泰同創投資管理有限公司 (transliterated as Beijing Hongtai Tongchuang Investment Management Co., Ltd.) and 共青城滙泉投 資管理合夥企業（有限合夥）(transliterated as Gongqing City Huiquan Investment Management Partnership (Limited Partnership)) (the ‘‘Subscription Agreement’’, a copy of which has been produced to the EGM and marked ‘‘A’’ and initialled by the Chairman of the EGM for the purposes of identification) in relation to the establishment of 華海證券股份有 限公司 (transliterated as HuaHai Securities Company Limited) (the ‘‘JV Company’’) and the terms thereof be and are hereby confirmed, approved and ratified;

3. (b) all the transactions contemplated under the Subscription Agreement including but not limited to the capital contribution by Fortune (HK) Securities Limited into the JV Company be and are hereby confirmed, approved and ratified; and

– 26 –

NOTICE OF EGM

• (c) the directors of the Company (‘‘Directors’’) be and are hereby authorised to do such acts and things, to sign and execute all such further documents and to take such steps as they may consider necessary, appropriate, desirable or expedient to give effect to or in connection with the Subscription Agreement and any transactions contemplated thereunder.’’

By Order of the Board China Fortune Financial Group Limited XIE Zhichun Chairman and Executive Director

Hong Kong, 20 December 2017

Registered office: P.O. Box 309, Ugland House Grand Cayman, KY1-1104 Cayman Islands

Principal place of business in Hong Kong: 35th Floor, Office Tower, Convention Plaza 1 Harbour Road Wanchai Hong Kong

Notes:

• (a) Any member of the Company entitled to attend and vote at the EGM is entitled to appoint a proxy to attend and vote on behalf of him/her/it. A proxy needs not be a member. A member of the Company who is the holder of two or more shares of the Company may appoint more than one proxy to represent him/ her/it to attend and vote on his/her/its behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares of the Company in respect of which each such proxy is so appointed.

• (b) In order to be valid, a form of proxy together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of authority, must be deposited at the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F., Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and delivery of the form of proxy shall not preclude a member from attending and voting in person at the EGM or any adjournment thereof should such member so wishes and, in such event, the form of proxy shall be deemed to be revoked.

• (c) Where there are joint registered holders of any shares of the Company, any one of such persons may vote at the EGM, either personally or by proxy, in respect of such shares as if he were solely entitled thereto; but if more than one of such joint holders be present at the EGM personally or by proxy, that one of the said persons so present being the most, or, as the case may be, the more senior shall alone be entitled to vote in respect of the relevant joint holding and, for this purpose, seniority shall be determined by reference to the order in which the names of the joint holders stand in the register of members of the Company in respect of the relevant joint holding.

• (d) All votes to be taken at the EGM shall be conducted by way of poll.

• (e) If a Typhoon Signal No. 8 or above is hoisted, a or a ‘‘Black’’ rainstorm warning signal is in force at or at any time after 8: 00 a.m. on the date of the EGM, the EGM will be postponed. The Company will post an announcement on the Company’s website and HKExnews website to notify the shareholders of the Company of the date, time and place of the rescheduled EGM.

– 27 –

NOTICE OF EGM

As at the date of this notice, the Board consists of three executive Directors, namely Mr. XIE Zhichun (Chairman), Mr. HAN Hanting and Mr. LIU Yinan; three non-executive Directors, namely Mr. TANG Baoqi, Mr. WU Ling and Mr. HUA Yang; and four independent non-executive Directors, namely Mr. CHAN Kin Sang, Mr. NG Kay Kwok, Mr. CHIU Kung Chik and Mr. LI Gaofeng.

– 28 –