Tsun Yip Holdings Limited — M&A Activity 2016

Jun 3, 2016

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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CNC HOLDINGS LIMITED 中國新華電視控股有限公司

(incorporated in the Cayman Islands with limited liability)

(stock code: 8356)

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE PROPOSED ACQUISITION OF 100% INTEREST IN SHENZHEN CC PARK

PROPOSED APPOINTMENT OF AN EXECUTIVE DIRECTOR

AND

RESUMPTION OF TRADING

THE ACQUISITION

The Board is pleased to announce that, on 2 February 2016, the Purchaser (being a wholly-owned subsidiary of the Company) entered into the Agreement with the Vendors pursuant to which the Purchaser conditionally agreed to acquire and the Vendors conditionally agreed to procure the sale of the Target Shares for a total consideration of HK$600,000,000. Upon Completion, the Purchaser will hold 100% of the equity interest in the Target Company and the Target Company will become a wholly-owned subsidiary of the Company.

The consideration for the Acquisition will be settled by a combination of the Cash Consideration and the Consideration Shares.

PROPOSED APPOINTMENT OF DIRECTOR

Pursuant to the Agreement, the Vendors have the right to nominate a person as a new executive Director. Any such appointment will be subject to the approval at the EGM. The Vendors have indicated that they will nominate Mr. Li as the new executive Director and accordingly a resolution in this connection will be proposed to the independent Shareholders to consider at the EGM. Further information in relation to Mr. Li will be announced as and when appropriate in compliance with the GEM Listing Rules.

LISTING RULES AND TAKEOVERS CODE IMPLICATIONS

As one or more of the relevant percentage ratios calculated pursuant to Chapter 19 of the GEM Listing Rules exceeds 100%, the Acquisition constitutes a very substantial acquisition for the Company. Further, as Mr. Li, a substantial shareholder of the Target Company, will be nominated as an executive Director of the Company and accordingly may become a controller of the Company

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as a result of the Acquisition (subject to the independent Shareholders' approval at the EGM), the Acquisition constitutes a connected transaction of the Company pursuant to Rule 20.26 of the GEM Listing Rules. Accordingly, the Acquisition will be subject to the reporting, announcement and independent shareholders’ approval requirements under the GEM Listing Rules.

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Acquisition, the issue of the Consideration Shares and the appointment of Mr. Li as a new executive Director. To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiry, no Shareholder has a material interest in the Acquisition. Therefore, no Shareholder is required to abstain from voting at the EGM.

A circular containing, among other things, (i) details of the Acquisition; (ii) the accountants' report on the Target Group; (iii) the pro forma financial information of the Enlarged Group upon Completion; (iv) the biography details of Mr. Li; (v) a notice convening the EGM; and (vi) other disclosures required under the GEM Listing Rules, will be despatched to the Shareholders on or before 29 July 2016 (i.e. more than 15 business days after the date of this announcement) in order to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

As at the date of this announcement, China Xinhua News Network is the single largest shareholder of the Company which holds 29.31% of the total issued share capital of the Company. China Xinhua News Network is also the holder of the outstanding convertible bonds issued by the Company in the principal amount of HK$257,030,210 which are convertible into new Shares at an issue price of HK$0.196 per Share. China Xinhua News Network and the Vendors will be presumed to be parties acting in concert if they proceed with the Acquisition unless rebutted. In the event that the presumption is not rebutted, a mandatory general offer obligation will be triggered under the Takeovers Code on the part of the Vendors and their concert parties pursuant to Rule 26.1 of the Takeovers Code upon completion of the Acquisition and hence the Acquisition will result in a reverse takeover of the Company under Chapter 19 of the GEM Listing Rules. In the event of such circumstances, the relevant condition precedent to the Completion will not be fulfilled and the Purchaser will not proceed with the Acquisition. Further announcement(s) will be made by the Company as and when appropriate.

RESUMPTION OF TRADING

Trading in the Shares was suspended at the request of the Company with effect from 9:00 a.m. on 2 February 2016 pending the release of this announcement. An application has been made by the Company to the Stock Exchange for the trading in the Shares to resume from 9:00 a.m. on 6 June 2016.

Shareholders and potential investors should note that Completion is subject to conditions to be fulfilled or waived (as the case may be) and may or may not proceed. Shareholders and potential investors should also note that there are risks associated with the Acquisition and they should consider and assess all the risks carefully. Shareholders and potential investors are reminded to exercise extreme caution when dealing in the Shares and other securities of the Company.

THE ACQUISITION

The Board is pleased to announce that, on 2 February 2016, the Purchaser (being a wholly-owned subsidiary of the Company) entered into the Agreement with the Vendors pursuant to which the Purchaser conditionally agreed to acquire and the Vendors conditionally agreed to procure the sale of the Target Shares for a total consideration of HK$600,000,000. Upon Completion, the Purchaser will hold 100% of the equity interest in the Target Company and the Target Company will become a wholly-owned subsidiary of the Company.

THE AGREEMENT

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Date

2 February 2016

Parties

• (a) the Purchaser (being a wholly-owned subsidiary of the Company)

• (b) the Vendors

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiry, as at the date of the Agreement, each of the Vendors is an individual who is a third party independent of the Company and its connected persons.

Assets to be acquired

The Purchaser conditionally agreed to acquire and the Vendors conditionally agreed to procure the sale of the Target Shares, representing 100% of the registered capital of the Target Company. Further information regarding the Target Group is set out in the paragraph headed "Information on the Target Group" below.

Consideration

The Consideration is HK$600,000,000 which will be partly settled on Completion by (i) the payment of the Cash Consideration of $160,000,000; and (ii) the issue and allotment of 1,900,000,000 Consideration Shares by the Company, subject to adjustment, if any. The remaining 300,000,000 Consideration Shares (subject to adjustment, if any) will be issued and allotted by the Company to the Vendors after Completion and after determination of the 2016 Net Profit pursuant to the terms of the Agreement. Please see the paragraph below headed "Adjustments to the Consideration and Profit Guarantee".

Subject to market conditions, the Company currently expects to finance the Cash Consideration by way of a placement of approximately 800,000,000 new Shares to independent third parties.

Basis of Consideration

The Consideration was arrived at after arm's length negotiations between the parties and was determined with reference to, among other things, the financial performance and business development and prospects of the Target Group.

Adjustments to the Consideration and Profit Guarantee

Pursuant to the Agreement, the Purchaser has an absolute discretion to adjust the portion of the Cash Consideration and Consideration Shares if, as a result of the issue and allotment of the Consideration Shares to the Vendors, (i) the Vendors and their concert parties may own 30% or more of the voting rights of the Company; (ii) a mandatory general offer under the Takeovers Code in respect of the Shares will be triggered on the part of the Vendors and their concert parties; or (iii) the transactions contemplated under the Agreement will be regarded as a reverse takeover of the Company under the GEM Listing Rules.

Pursuant to the Agreement, the Vendors irrevocably guarantee to the Purchaser that each of the 2016 Net Profit, 2017 Net Profit and 2018 Net Profit shall not be less than RMB50,000,000 (in each case, except for reason due to occurrence of force majeure events (such as natural disaster, war etc.), the acceptance of such exception to the sole discretion of the Purchaser), and agree to indemnify the Purchaser jointly and severally of any 2016 Net Profit Shortfall, 2017 Net Profit Shortfall and 2018 Net Profit Shortfall. Accordingly, out of the Consideration Shares, 300,000,000 Consideration Shares (subject to adjustment, if any) of which will not be issued and allotted pending determination of whether the 2016 Net Profit will be met. Upon the occurrence of a 2016 Net Profit Shortfall, the Purchaser may reduce the number of Consideration Shares from the said 300,000,000 Consideration Shares, calculated based on the following formula:

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2016 Net Profit Shortfall

A =

HK$0.20, being the issue price per share of the Consideration Shares

Where “A” is the number of Consideration Shares to be reduced from the 300,000,000 Consideration Shares (subject to adjustment, if any) which have not yet been issued by the Company upon Completion.

Upon the occurrence of a 2017 Net Profit Shortfall or 2018 Net Profit Shortfall, the Vendors will be required to pay to the Purchaser such amount of shortfall in cash.

Consideration Shares

The issue price of the Consideration Shares of HK$0.20 per Share represents:

• (a) a discount of approximately 21.56% over the closing price of HK$0.255 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (b) a discount of approximately 17.01% over the average closing price of approximately HK$0.241 per Share for the last five consecutive trading days up to and including the Last Trading Day; and

• (c) a discount of approximately 17.01% over the average closing price of approximately HK$0.241 per Share for the last ten consecutive trading days up to and including the Last Trading Day.

The issue price of HK$0.20 per Consideration Share was arrived at by the parties after arm's length negotiations taking into account, among other things, the historical trading prices of the Shares, the net asset value of the Company per Share as of 30 September 2015 (being HK$0.004), the financial performance, business development and prospects of the Target Group, and the profit guarantee provided by the Vendors.

The Consideration Shares of 2,200,000,000 Shares represent (i) approximately 54.25% of the existing issued share capital of the Company; and (ii) approximately 26.29% of the enlarged issued share capital of the Company immediately upon completion of both of (a) the Company's proposed placing for the purpose of financing the Cash Consideration, and (b) conversion of the outstanding Convertible Bonds as more particularly described in the paragraph headed "Shareholding Structure of the Company" below. The Consideration Shares, when issued, will rank pari passu in all respects with the existing Shares then in issue. The Company proposes to seek a special mandate from the Shareholders at the EGM for the issue and allotment of the Consideration Shares.

An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

The Vendors jointly and severally undertake to the Purchaser and the Company that the Vendors shall not directly or indirectly, among other things, offer to sell, lend, charge or otherwise dispose of or transfer any of the Consideration Shares (or any interest therein) from the date of the Agreement up to the expiry of the 24-month period after the Completion Date.

Conditions Precedent to Completion

The Completion is subject to the following conditions:

• (a) due diligence investigation on, among other things, the value, business, operations, assets, liabilities, financial status and prospects of Target Group having been completed by the Purchaser and the results of such due diligence investigation being satisfactory to the Purchaser (including but not limited to any loan, guarantee, pledge or other similar obligations provided by any member of the Target Group to any non-member of the Target Group having been duly discharged to the satisfaction of the Purchaser);

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• (b) the representations and warranties given by the Vendors remaining true and accurate in all respects and not misleading at Completion;

• (c) the Purchaser and the Company having obtained sufficient funding for the Cash Consideration (including but not limited to the completion of any placing of Shares by the Company for this purpose);

• (d) the consummation of the transactions contemplated under the Agreement does not (i) trigger a mandatory general offer obligation under the Takeovers Code on the part of the Vendors and their concert parties; (ii) constitute a reverse takeover of the Company under the GEM Listing Rules; or (iii) result in the Vendors (either individually or together) becoming the single largest Shareholder;

• (e) all consents, permits, authorisations, authorities and formal approvals (as the case may be) that each of the Purchaser and each of the Vendors considers reasonable pursuant to applicable laws, regulations or rules for the execution, implementation and Completion of the Agreement (including but not limited to the approval from the Shareholders as required under the GEM Listing Rules and the Stock Exchange's approval and clearance for (i) the allotment and issue of the Consideration Shares and the listing thereof on the GEM, and (ii) the appointment of the person jointly nominated by the Vendors as an executive Director) having been obtained;

• (f) all such consents, permits, authorisations, authorities and formal approvals as referred to above not having been revoked or withdrawn at any time up to Completion; and

• (g) the completion of the placing by the Company of approximately 800,000,000 new Shares or such appropriate number of new Shares to independent third party(ies) to the effect that the Vendors' total interest in the voting rights of the Company immediately upon Completion would not reach or exceed 30%.

The Purchaser may waive all or any of the above conditions precedent (other than (a)(to the extent that any loan, guarantee, pledge or other similar obligations provided by any member of the Target Group to any non-member of the Target Group not having been discharged to the satisfaction of the Purchaser), (d), (e), (f) and (g)) by notice to the Vendors on or before 31 December 2016. As at the date of this announcement, the Purchaser has no intention to waive any of such conditions precedent. As at the date of this announcement, none of the conditions precedent to Completion has been fulfilled.

If all of the conditions are not fulfilled or otherwise waived (as the case may be) on or before 31 December 2016, the Purchaser has the right to terminate the Agreement and all obligations of the parties under the Agreement shall end but all rights and liabilities of the parties which have accrued before termination shall continue to exist.

Completion

Completion shall take place on the Completion Date. Upon Completion, the Target Company and Shenzhen Zishengfa will become wholly owned subsidiaries of the Company.

PROPOSED APPOINTMENT OF AN EXECUTIVE DIRECTOR

Pursuant to the Agreement, the Vendors have the right to nominate a person as a new executive Director. Any such appointment will be subject to the approval at the EGM. The Vendors have indicated that they will nominate Mr. Li as the new executive Director and accordingly a resolution in this connection will be proposed to the independent Shareholders to consider at the EGM. Further information in relation to Mr. Li will be announced as and when appropriate in compliance with the GEM Listing Rules.

INFORMATION ON THE TARGET GROUP

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The Target Company is a company established in the PRC with an initial registered capital of RMB6,000,000. As of the date of the Agreement, the Target Company had a registered capital of RMB40,800,000 and was indirectly held by the Vendors who are merchants in the PRC.

The primary business of the Target Group is the operation and management of the Shenzhen CC Park, which is located at the junction of South Xinzhou Road and Fuqiang Road in the Futian District of Shenzhen. Shenzhen CC Park is the first project in the cultural creative industry of Shenzhen, and created for the idea of "Implementing industrial replacement and adjusting industrial structure, to achieve industrial advancement"* (" 實施產業置換，調整產業結構，實現產業升級 "), which won key support from the Shenzhen Municipal People's Government. According to the approved land-use plans of Shenzhen, the Shenzhen CC Park is planned for type 2 residential and ancillary functions and cultural facilities function. Shenzhen CC Park covers a total site area of approximately 60,000 sqm with a gross floor area of nearly 180,000 sqm, and is the largest integrated cultural industry cluster in the central area of Shenzhen. The park comprises two phases, being Phase I and Phase II of an aggregate floor area of 98,000 square metres and 74,000 square metres (including underground car park areas), respectively.

The Target Group operates and manages of this park for rental income including management fee. As advised by the Vendors and the Target Group, the Target Group:

• provides value-added services to its clients, including sales and marketing, support on daily operation and management and customer services;

• organises promotional activities to stimulate consumption in the park from time to time;

• provides designated show rooms and exhibition areas for its clients to present their companies, cultural concept and products;

• provides supports in relation to intellectual property issues to its clients; and

• where appropriate and required, assists to introduce capital investment institutions to its clients via company presentation, management discussions and site visits.

According to the Target Company, it has applied and successfully enrolled the Shenzhen CC Park as one of the venues designated for the China (Shenzhen) International Cultural Industries Fair (ICIF). The Company understands from the Vendors and the Target Company that ICIF is the only international and comprehensive cultural industry fair at the national level and is jointly organised by the People's Republic of China Ministry of Culture, People's Republic of China Ministry of Commerce, the National Film and Television broadcast, People's Republic of China Press and Publication Administration, China Council for the Promotion of International Trade Guangdong Provincial People's Government and the Shenzhen Municipal People's Government, and that it is the only comprehensive cultural industry fair in China which has obtained UFI (Union of International Fairs) certification, and was included in the nation's Cultural Development Plan during the "Eleventh Five-Year" as one of the key fairs to support.

The land upon which this park is located has been leased to the Target Group for a term of up to 18 years. The terms for the lease agreements are up to 31 December 2022 for Phase I, and 23 February 2026 for Phase II, respectively. Pursuant to the lease agreements, the aggregate rent per month for Phase I and Phase II is approximately RMB2,215,000 and RMB1,438,000, respectively.

FINANCIAL INFORMATION OF THE TARGET COMPANY

The Target Company

Set out below is the financial information of the Target Company based on the audited financial statements for the year ended 31 December 2014 and the unaudited financial statements for the year ended 31 December 2015. The financial information of the Target Company was prepared in accordance with the generally accepted accounting principles of the PRC (PRC GAAP).

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	For the year ended	31 December
	2014(audited)	2015(unaudited)
	(RMB ’000,000)	(RMB ’000,000)
Turnover	127.6	148.0
Profit before taxation	43.1	67.0
Net profit after taxation	32.5	50.1
	As at 31 December
	2014(audited)	2015(unaudited)
	(RMB ’000,000)	(RMB ’000,000)
Total assets	770.4	663.5
Total liabilities	649.4	492.4
Net assets	121.0	171.1

REASONS AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in the provision of waterworks engineering services for the public sector in Hong Kong, television broadcasting business in the Asia-Pacific region (excluding the PRC) in return for advertising and related revenue and large outdoor display screen advertising business in PRC. The Company endeavours to enhance the competitiveness of the Group’s existing business and at the same time, explore new business opportunities to broaden its source of income and expand the business operations in order to maximize profit and return for the Company and the Shareholders. After Completion, the Group intends to promote Shenzhen as a cultural creative city, and the Group may make urban renewal proposals to the Shenzhen Municipal People's Government. The Board believes that the Acquisition represents a valuable business opportunity for the Group to invest in the cultural-related industry and will broaden the Group's income and asset base. In particular, the Board believes that the existing TV business of the Group and the cultural-related business of the Target Group will complement with each other and there will be synergies between them.

The Board considers that the Agreement is on normal commercial terms and its terms are fair and reasonable and in the interests of the Company and the Shareholders taken as a whole.

SHAREHOLDING STRUCTURE OF THE COMPANY

Assuming there will be no adjustment to the number of Consideration Shares and no other factors affecting the shareholding structure of the Company, set out below is the shareholding structure of the Company (i) as at the date of this announcement, (ii) immediately upon Completion (assuming that 1,900,000,000 Consideration Shares will be issued and allotted upon Completion), and (iii) immediately upon further issue and allotment of 300,000,000 Consideration Shares:

China Xinhua News Network Mr Chia Kar Hin, Eric John (an executive Director) Mr Kan Kwok Cheung (an executive Director) Public Vendors

As at the date of this announcement Upon Completion (Note) Upon issue of Consideration Shares in full (Note) Number of Shares % Number of Shares % Number of Shares % 1,188,621,377 29.31% 2,362,090,764 29.79% 2,499,999,998 29.88% 14,600,000 0.36% 14,600,000 0.19% 14,600,000 0.17% 69,000,000 1.70% 69,000,000 0.87% 69,000,000 0.83% 2,783,128,570 68.63% 3,583,128,570 45.19% 3,583,128,570 42.83% -- -- 1,900,000,000 23.96% 2,200,000,000 26.29%

4,055,349,947 100.00% 7,928,819,334 100.00% 8,366,728,568 100.00%

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Note: This is on the basis that (i) a total of 800,000,000 new Shares will be placed by the Company to independent third parties for the purpose of financing the Cash Consideration; and (ii) part of the outstanding Convertible Bonds held by China Xinhua News Network will be converted into a total of 1,173,469,387 new Shares simultaneously upon Completion. China Xinhua News Network has notified the Company (i) of its intention to convert part of its outstanding Convertible Bonds into a total of 1,173,469,387 new Shares simultaneously upon Completion; and (ii) that it may further convert part or all of its then outstanding Convertible Bonds into up to another 137,909,234 new Shares simultaneously with the issue and allotment of the outstanding 300,000,000 Consideration Shares (if any) by the Company to the Vendors post-Completion, so that China Xinhua News Network will remain as the single largest Shareholder immediately upon such further issue and allotment.

LISTING RULES IMPLICATIONS

As one or more of the relevant percentage ratios calculated pursuant to Chapter 19 of the GEM Listing Rules exceeds 100%, the Acquisition constitutes a very substantial acquisition for the Company. Further, as Mr Li, a substantial shareholder of the Target Company, will be nominated as an executive Director of the Company and accordingly may become a controller of the Company as a result of the Acquisition (subject to the independent Shareholders' approval at the EGM), the Acquisition constitutes a connected transaction of the Company pursuant to Rule 20.26 of the GEM Listing Rules. Accordingly, the Acquisition will be subject to the reporting, announcement and independent shareholders’ approval requirements under the GEM Listing Rules.

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Acquisition, the issue of the Consideration Shares and the appointment of Mr. Li as a new executive Director. To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiry, no Shareholder has a material interest in the Acquisition. Therefore, no Shareholder is required to abstain from voting at the EGM.

A circular containing, among other things, (i) details of the Acquisition; (ii) the accountants' report on the Target Group; (iii) the pro forma financial information of the Enlarged Group upon Completion; (iv) the biography details of Mr. Li; (v) a notice convening the EGM; and (vi) other disclosures required under the GEM Listing Rules, will be despatched to the Shareholders on or before 29 July 2016 (i.e. more than 15 business days after the date of this announcement) in order to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

As at the date of this announcement, China Xinhua News Network is the single largest shareholder of the Company which holds 29.31% of the total issued share capital of the Company. China Xinhua News Network is also the holder of the outstanding convertible bonds issued by the Company in the principal amount of HK$257,030,210 which are convertible into new Shares at an issue price of HK$0.196 per Share. China Xinhua News Network and the Vendors will be presumed to be parties acting in concert if they proceed with the Acquisition unless rebutted. In the event that the presumption is not rebutted, a mandatory general offer obligation will be triggered under the Takeovers Code on the part of the Vendors and their concert parties pursuant to Rule 26.1 of the Takeovers Code upon completion of the Acquisition and hence the Acquisition will result in a reverse takeover of the Company under Chapter 19 of the GEM Listing Rules. In the event of such circumstances, the relevant condition precedent to the Completion will not be fulfilled and the Purchaser will not proceed with the Acquisition. Further announcement(s) will be made by the Company as and when appropriate.

RESUMPTION OF TRADING

Trading in the Shares was suspended at the request of the Company with effect from 9:00 a.m. on 2 February 2016 pending the release of this announcement. An application has been made by the Company to the Stock Exchange for the trading in the Shares to resume from 9:00a.m. on 6 June 2016.

Shareholders and potential investors should note that Completion is subject to conditions to be fulfilled or waived (as the case may be) and may or may not proceed. Shareholders and potential investors should also note that there are risks associated

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with the Acquisition and they should consider and assess all the risks carefully. Shareholders and potential investors are reminded to exercise extreme caution when dealing in the Shares and other securities of the Company.

DEFINITIONS

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

"2016 Net Profit"	the audited consolidated net profits attributable to shareholders
	(excluding any income or loss generated by activities outside the
	ordinary and usual course of the business) of the Target Group for
	the year ending 31 December 2016
"2017 Net Profit"	the audited consolidated net profits attributable to shareholders
	(excluding any income or loss generated by activities outside the
	ordinary and usual course of the business) of the Target Group for
	the year ending 31 December 2017
"2018 Net Profit"	the audited consolidated net profits attributable to shareholders
	(excluding any income or loss generated by activities outside the
	ordinary and usual course of the business) of the Target Group for
	the year ending 31 December 2018
"2016 Net Profit	the difference between the 2016 Net Profit and RMB50,000,000,
Shortfall"	where the 2016 Net Profit is less than RMB50,000,000
"2017 Net Profit	the difference between the 2017 Net Profit and RMB50,000,000,
Shortfall"	where the 2017 Net Profit is less than RMB50,000,000
"2018 Net Profit	the difference between the 2018 Net Profit and RMB50,000,000,
Shortfall"	where the 2018 Net Profit is less than RMB50,000,000
"Acquisition"	the sale and purchase of the Target Shares contemplated under the
	Agreement
"Agreement"	the sale and purchase agreement dated 2 February 2016 entered
	into among the Vendors and the Purchaser in relation to the
	Acquisition, as amended and supplemented from time to time, and
	as consolidated and superseded by the amended and restated sale
	and purchase agreement dated 3 June 2016
"Board"	the board of Directors
"Cash Consideration"	HK$160,000,000 (subject to adjustment, if any) to be paid by the
	Purchaser to the Vendors as part of the Consideration at Completion
"China Xinhua News	China Xinhua News Network Co., Ltd, being an indirect wholly-
Network"	owned subsidiary of China Xinhua News Agency and a substantial
	shareholder of the Company
"Completion"	completion of the Acquisition
"Completion Date"	the date of Completion which the second Business Day after the
	date on which the last of the applicable conditions precedent of the
	Agreement is satisfied or waived, as the case may be
"Company"	CNC Holdings Limited, a company incorporated in the Cayman
	Islands with limited liability, the shares of which are listed on the

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GEM

"connected person(s)"	has the meaning ascribed to it under the GEM Listing Rules
"Consideration"	the total consideration in the amount of HK$600,000,000 (subject
	to adjustment, if any) in respect of the Acquisition pursuant to the
	Agreement
"Consideration Shares"	2,200,000,000 Shares (subject to adjustment, if any) to be issued
	by the Company to the Vendors at the issue price of HK$0.20 per
	Share which will partly be issued and allotted to the Vendors at
	Completion and the remaining of which (if any) will be issued and
	allotted to the Vendors post-Completion
"Convertible Bonds"	the outstanding convertible bonds issued by the Company to China
	Xinhua News Network in the principal amount of HK$257,030,210
	which are convertible into new Shares at an issue price of HK$0.196
	per Share
"Director(s)"	the director(s) of the Company
"EGM"	the extraordinary general meeting of the Company to be convened
	to consider and, if thought fit, approve the Acquisition including the
	issue and allotment of the Consideration Shares and the
	appointment of a new executive Director to be nominated by the
	Vendors
"Enlarged Group"	the Group as enlarged by the Acquisition
"GEM"	the Growth Enterprise Market of the Stock Exchange
"GEM Listing Rules"	the Rules Governing the Listing of Securities on GEM
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Last Trading Day"	1 February 2016, being the last trading date of the Company prior
	to the publication of this announcement
"Mr. Li"	Mr. Li Yinfa, a natural person and the indirect owner of 90% equity
	interest in the Target Company as at the date of this announcement
"Ms. Li"	Ms. Li Yanyun, a natural person and the indirect owner of 10%
	equity interest in the Target Company as at the date of this
	announcement
"PRC"	the People's Republic of China and for the purpose of this
	announcement, excludes Hong Kong, the Macau Special
	Administrative Region and Taiwan
"Purchaser"	Succeed Capital Limited, a company incorporated in the British
	Virgin Islands with limited liability and a wholly-owned subsidiary of
	the Company
"SFC"	Securities and Futures Commission of Hong Kong

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"Share(s)" ordinary share(s) of the Company "Shareholder(s)" holder(s) of the Share(s) "Shenzhen CC Park" Shenzhen City Culture Creative Park[ ] ( 深圳市文化創意園 ) "Shenzhen Zishengfa" Shenzhen Zishengfa Property Services Co., Ltd. ( 深圳市梓盛發物業服 務有限公司 ), a company established under the laws of the PRC with limited liability and a wholly-owned subsidiary of the Target Company "sqm" square metres "Stock Exchange" The Stock Exchange of Hong Kong Limited "Takeovers Code" the Code on Takeovers and Mergers issued by the SFC "Target Company" Shenzhen City Century Culture Creative Limited[* ] ( 深圳市世紀文化創意 有限公司 ), a company established under the laws of the PRC with limited liability and is indirectly owned by Mr. Li and Ms. Li as to 90% and 10% respectively "Target Group" the Target Company and Shenzhen Zishengfa "Target Shares" an aggregate of 100% equity interest in the Target Company, which is indirectly owned by Mr. Li and Ms. Li as to as to 90% and 10% respectively "Vendors" Mr. Li and Ms. Li "%" percent

* For identification purposes only

By order of the Board CNC Holdings Limited Li Yuet Tai Company Secretary

Hong Kong, 3 June 2016

As at the date of this announcement, the Directors are Mr. Zhang Hao[1] (Chairman), Mr. Zou Chen Dong[1] (Vice Chairman and Chief Executive Officer), Mr. Kan Kwok Cheung[1] , Mr. Chia Kar Hin, Eric John[1] , Dr. Li Yong Sheng[2] , The Hon. Ip Kwok Him, GBS, JP[3] , Mr. Wan Chi Keung, Aaron, BBS, JP[3] , Mr. Jin Hai Tao[3] and Mr. Wong Chung Yip, Kenneth[3] .

1 Executive Director 2 Non-executive Director

3Independent non-executive Director

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This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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 announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the GEM website at http://www.hkgem.com on the “Latest Company Announcements” page for at least seven days from the date of its posting and the Company’s website at www.cnctv.hk.

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