Tsun Yip Holdings Limited — Proxy Solicitation & Information Statement 2010

Dec 2, 2010

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about 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 Tsun Yip Holdings Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company 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.

==> picture [81 x 50] intentionally omitted <==

TSUN YIP HOLDINGS LIMITED 進業控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8356)

PROPOSED SHARE SUBDIVISION AND CHANGE OF BOARD LOT SIZE

A notice convening an extraordinary general meeting of the Company to be held at Room 3, United Conference Centre Limited, 10/F, United Centre, 95 Queensway, Hong Kong on Wednesday, 22 December 2010 at 10:30 a.m. is set out on pages 8 to 9 of this circular. Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Investor Services Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

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

3 December 2010

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the main board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

— i —

CONTENTS

Pages	Pages
Expected timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
The Share Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
The Board Lot Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Reasons for the Share Subdivision and the Board Lot Change . . . . . . . . . . . . . . . . . . . .	5
Exchange of share certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Trading arrangements for the Subdivided Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Competing Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Responsbility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
The EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

— ii —

EXPECTED TIMETABLE

The expected timetable for the implementation of the Share Subdivision and the Board Lot Change is set out below:

10:30 a.m., on Latest time for lodging the form of proxy for the EGM . . . . . . . . . . . Monday, 20 December 2010 10:30 a.m., on Date and time of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 22 December 2010

The following events are conditional on the fulfullment of the conditions for the implementation of the Share Subdivision as set out in the section headed “The Share Subdivision” in the letter from the Board contained in this circular.

Effective date of the Share Subdivision . . . . . . . . .	. . . . . . . . . . . . . .Thursday, 23 December 2010	. . . . . . . . . . . . . .Thursday, 23 December 2010	. . . . . . . . . . . . . .Thursday, 23 December 2010	. . . . . . . . . . . . . .Thursday, 23 December 2010	. . . . . . . . . . . . . .Thursday, 23 December 2010
					9:30 a.m., on
Dealings in the Subdivided Shares commence . . . . .	. . . . . . . . . . . . .	Thursday, 23 December 2010
Temporary counter for trading in Subdivided Shares
in board lots of 20,000 Subdivided Shares					9:30 a.m., on
(in the form of existing share certificates) opens . . . . . . . . . . . . . .		Thursday, 23 December 2010
Original counter for trading in board lots of					9:30 a.m., on
2,000 Shares temporarily closes . . . . . . . . . . . . .	. . . . . . . . . . . . .	Thursday, 23 December 2010
Free exchange of existing certificates for
the Shares for new certificates for
the Subdivided Shares commences . . . . . . . . . . .	. . . . . . . . . . . . . .Thursday, 23 December 2010
Original counter for trading in Subdivided Shares
in board lots of 10,000 Subdivided Shares					9:30 a.m., on
(in the form of new share certificates) reopens . .	. . . . . . . . . . . . .	. .	.	. .	Friday, 7 January 2011
Parallel trading in the Subdivided Shares (in the form of					9:30 a.m., on
existing share certificates and new share certificates) commences .		. .	.	. .	Friday, 7 January 2011
Temporary counter for trading in Subdivided Shares
in board lots of 20,000 Subdivided Shares					4:00 p.m., on
(in the form of existing share certificates) closes	. . . . . . . . . . . . .	. .	Thursday, 27 January 2011
Parallel trading in the Subdivided Shares (in the form of existing					4:00 p.m., on
share certificates and new share certificates) ends	. . . . . . . . . . . . .	. .	Thursday, 27 January 2011
Free exchange of existing certificates for
the Shares for new certificates for					4:00 p.m., on
the Subdivided Shares ends . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . .	. .	.	Monday, 31 January 2011

Note: All times and dates refer to Hong Kong local times and dates

— 1 —

DEFINITIONS

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

• “Board” the board of Directors “Board Lot Change” the change of the board lot size from 2,000 Shares to 10,000 Subdivided Shares upon the Share Subdivision becoming effective

• “CCASS” the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited

• “Company” Tsun Yip Holdings Limited, a company incorporated in the Cayman Islands and the issued Shares of which are listed on the GEM

• “Director(s)” director(s) of the Company “EGM” the extraordinary general meeting of the Company to be held to consider and, if thought fit, approve the Share Subdivision and the matters contemplated thereunder

• “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 “Latest Practicable Date” 30 November 2010, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular

• “Share(s)” existing ordinary share(s) of HK$0.01 each in the share capital of the Company

• “Share Option Scheme” the share option scheme of the Company adopted and approved by the Shareholders on 11 August 2010

• “Share Subdivision” the subdivision of every existing Share (both issued and unissued) of par value of HK$0.01 into 10 new shares of par value of HK$0.001 each as referred to in the paragraph headed “The Share Subdivision”

• “Shareholders” holders of Share(s) or Subdivided Share(s) (as the case may be)

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subdivided Share(s)” new ordinary share(s) of HK$0.001 each in the share capital of the Company following the Share Subdivision

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

— 2 —

LETTER FROM THE BOARD

==> picture [80 x 50] intentionally omitted <==

TSUN YIP HOLDINGS LIMITED 進業控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8356)

Executive Directors: Kan Kwok Cheung Cheng Ka Ming, Martin Fung Chung Kin Chia Thien Loong, Eric John

Independent non-executive Directors: Lim Hung Chun Lo Ho Chor Sung Lee Kwok

Registered office: Cricket Square Hutchins Drive PO Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Flat 314, 3/F Fuk Shing Commercial Building 28 On Lok Mun Street Fanling, New Teritories Hong Kong 3 December 2010

To the Shareholders

Dear Sir/Madam,

PROPOSED SHARE SUBDIVISION AND CHANGE OF BOARD LOT SIZE

INTRODUCTION

The Company announced on 18 November 2010 that it proposed to subdivide each existing issued and unissued Share of HK$0.01 each into 10 Subdivided Shares of HK$0.001 each. The Shares are currently traded on the Stock Exchange in a board lot size of 2,000 Shares. The Board also proposed that, subject to and upon the Share Subdivision becoming effective, the board lot size be changed from 2,000 Shares to 10,000 Subdivided Shares.

The purpose of this circular is to provide you with information relating to, among other things, (i) details of the Share Subdivision and the Board Lot Change; (ii) the trading arrangements in respect of the Subdivided Shares; (iii) the procedure for the free exchange of existing share certificates for new certificates for the Subdivided Shares; and (iv) the notice of the EGM.

— 3 —

LETTER FROM THE BOARD

THE SHARE SUBDIVISION

As at the Latest Practicable Date, the authorised share capital of the Company was HK$500,000,000 divided into 50,000,000,000 Shares of HK$0.01 each, of which 99,200,000 Shares had been issued and were fully paid or credited as fully paid. No share options have been granted pursuant to the Share Option Scheme since its adoption and the Company had no outstanding warrants, convertibles, share options or derivatives as at the Latest Practicable Date.

The Board proposes to subdivide each existing issued and unissued Share of HK$0.01 each into 10 Subdivided Shares of HK$0.001 each. Upon the Share Subdivision becoming effective, the authorised share capital of the Company will be HK$500,000,000 divided into 500,000,000,000 Subdivided Shares, of which 992,000,000 Subdivided Shares will be in issue and fully paid or credited as fully paid, assuming that no further Shares will be issued or repurchased after the Latest Practicable Date and prior to the Share Subdivision becoming effective.

The Subdivided Shares will rank pari passu in all respects with each other. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Subdivided Shares to be in issue and any Subdivided Shares to be issued pursuant to the exercise of any share options which may be granted under the Share Option Scheme upon the Share Subdivision becoming effective. All necessary arrangements will be made for the Subdivided Shares to be admitted into CCASS.

Subject to the granting of the listing of, and permission to deal in, the Subdivided Shares on the Stock Exchange, the Subdivided Shares will be accepted as eligible securities by Hong Kong Securities Clearing Company Limited for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Subdivided Shares on the Stock Exchange or such other date as may be determined by Hong Kong Securities Clearing Company Limited. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

None of the securities of the Company is listed or dealt in on any other stock exchange other than the Stock Exchange and no such listing or permission to deal is being or is proposed to be sought.

Conditions of the Share Subdivision

The Share Subdivision is conditional on:

• (a) the passing by the Shareholders at the EGM of an ordinary resolution approving the Share Subdivision; and

• (b) the Stock Exchange granting the listing of, and permission to deal in, the Subdivided Shares to be in issue and any Subdivided Shares to be issued pursuant to the exercise of any share options which may be granted under the Share Option Scheme upon the Share Subdivision becoming effective.

— 4 —

LETTER FROM THE BOARD

THE BOARD LOT CHANGE

The Shares are currently traded on the Stock Exchange in a board lot size of 2,000 Shares. The Board also proposes that, subject to and upon the Share Subdivision becoming effective, the board lot size be changed from 2,000 Shares to 10,000 Subdivided Shares. The Board Lot Change ensures that the value of each board lot of the Subdivided Shares would be more than HK$2,000 and minimises transaction and registration costs in respect of transfer of Subdivided Shares. The Board considers the Board Lot Change to be in the interests of the Company and the Shareholders as a whole.

REASONS FOR THE SHARE SUBDIVISION AND THE BOARD LOT CHANGE

The proposed Share Subdivision will decrease the nominal value and trading price of each share and increase the total number of shares in issue. The Directors are of the view that the increase in number of shares of the Company and the decrease in board lot value as a result of the Share Subdivision and the Board Lot Change will improve the liquidity in trading of the Subdivided Shares, thereby enabling the Company to attract more investors and broaden its Shareholders’ base eventually. The Directors also consider that the Board Lot Change will result in the Subdivided Shares being traded in a more reasonable board lot size and value. The implementation of the Share Subdivision and the Board Lot Change are in the interests of the Company and its Shareholders as a whole and would not have any adverse effect on the financial position of the Company.

Other than the expenses (including printing charges and professional fees) to be incurred by the Company in relation to the Share Subdivision and the Board Lot Change, the implementation thereof will not, by itself, affect the underlying assets, business operations, management or financial position of the Group or the interests of Shareholders as a whole.

EXCHANGE OF SHARE CERTIFICATES

Arrangements will also be made so that subject to the Share Subdivision becoming effective, the Shareholders can submit their existing certificates for Shares to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong in exchange for new certificates for Subdivided Shares free of charge during the business hours from 23 December 2010 to 31 January 2011 (both days inclusive). After the expiry of such period, existing certificates for Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may from time to time specified by the Stock Exchange) for each new share certificate issued or each existing share certificate submitted, whichever number of share certificates involved is higher.

It is expected that the new share certificates will be available for collection within a period of 10 business days after the submission of the existing share certificates. The new share certificates will be issued in green colour in order to distinguish them from existing share certificates which are in blue colour.

From 28 January 2011 onwards, existing certificates for the Shares will cease to be valid for trading and settlement purpose but will continue to be good evidence of legal title to the Subdivided Shares on the basis of one Share for 10 Subdivided Shares.

— 5 —

LETTER FROM THE BOARD

TRADING ARRANGEMENTS FOR THE SUBDIVIDED SHARES

Subject to the Share Subdivision becoming effective, dealings in the Subdivided Shares are expected to commence on Thursday, 23 December 2010. Parallel trading in the Subdivided Shares (in the form of existing share certificates and new share certificates) will be operated from Friday, 7 January 2011 to Thursday, 27 January 2011 (both days inclusive). Full details of the expected timetable and trading arrangements of the Shares and the Subdivided Shares are set out on page 1 of this circular.

COMPETING INTERESTS

An executive Director, Mr. Chia Thien Loong, Eric John, is the director and the beneficial owner of Vietnam Infrastructure (BVI) Limited, a company engaged in the provision of civil engineering services in Vietnam. The civil engineering services provided by Vietnam Infrastructure (BVI) Limited are similar to those provided by the Group but are limited to Vietnam. Mr. Chia confirms that Vietnam Infrastructure (BVI) Limited does not intend to extend its business to Hong Kong. As the Group and Vietnam Infrastructure (BVI) Limited are carrying on business in two distinct jurisdictions, the Directors consider that the business of Vietnam Infrastructure (BVI) Limited is not in direct competition with that of the Group.

As at the Latest Practicable Date, Mr. Chia was interested in less than 1.0% in the issued share capital of Mongolia Investment Group Limited (formerly known as Ming Hing Waterworks Holdings Limited), a company whose issued shares are listed on the Main Board of the Stock Exchange and which is engaged in a business similar to that of the Group. Mr. Chia has not held and does not presently hold any position in or was not otherwise and is not presently involved in the daily operations of Mongolia Investment Group Limited or any of its subsidiaries or associated companies. Mr. Chia holds its interests in Mongolia Investment Group Limited for investment purpose.

Saved as disclosed above, as at the Latest Practicable Date, none of the Directors, controlling Shareholder or their respective associates (as defined under the GEM Listing Rules) was interested in any business apart from the Group’s business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

RESPONSIBILITY STATEMENT

This circular, 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 circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

— 6 —

LETTER FROM THE BOARD

THE EGM

Set out on pages 8 to 9 of this circular is a notice convening the EGM to be held at Room 3, United Conference Centre Limited, 10/F, United Centre, 95 Queensway, Hong Kong on Wednesday, 22 December 2010 at 10:30 a.m.. (or such adjournment thereof), at which an ordinary resolution on the Share Subdivision will be proposed to the Shareholders for consideration and approval.

The resolution will be voted by way of poll at the EGM. As no Shareholders have a material interest in the Share Subdivision which is different from that of the other Shareholders, no Shareholder will be required to abstain from voting on the resolution to approve the Share Subdivision.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event by not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. 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 should you so wish.

RECOMMENDATION

The Directors consider that the proposed Share Subdivision is in the interests of the Company and the Shareholders as a whole and therefore recommend the Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Share Subdivision and the matters contemplated thereunder.

Yours faithfully, For and on behalf of Tsun Yip Holdings Limited Kan Kwok Cheung Chairman and Executive Director

— 7 —

NOTICE OF THE EGM

==> picture [80 x 50] intentionally omitted <==

TSUN YIP HOLDINGS LIMITED 進業控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8356)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“ EGM ”) of Tsun Yip Holdings Limited (“ Company ”) will be held at Room 3, United Conference Centre Limited, 10/F, United Centre, 95 Queensway, Hong Kong on Wednesday, 22 December 2010 at 10:30 a.m. for the purpose of considering and, if thought fit, passing the following resolution of the Company:

ORDINARY RESOLUTION

“ THAT conditional on The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the subdivided shares of HK$0.001 each in the issued share capital of the Company, each of the issued and unissued share of HK$0.01 in the share capital of the Company be sub-divided into 10 new shares of HK$0.001 each (“ Share Subdivision ”) with effect from the business day immediately following the day on which this resolution is passed so that the authorised share capital of the Company will be HK$500,000,000 divided into 500,000,000,000 shares of HK$0.001 each immediately following the Share Subdivision, and any director of the Company be and is hereby authorised to sign and execute such documents and do all such acts and things incidental to any of the foregoing as he considers necessary, desirable or expedient in connection with the implementation of or giving effect to any of the foregoing and the transactions contemplated thereunder.’’

By order of the Board Tsun Yip Holdings Limited Tam Tsang Ngai Company Secretary

Hong Kong, 3 December 2010

Registered office: Cricket Square Hutchins Drive PO Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Flat 314, 3/F Fuk Shing Commercial Building 28 On Lok Mun Street Fanling, New Teritories Hong Kong

— 8 —

NOTICE OF THE EGM

Notes:

1. Any member of the Company entitled to attend and vote at the EGM is entitled to appoint one or, if he/she holds two or more Shares, more than one proxy to attend and vote instead of him/her. A proxy need not be a member of the Company.

2. A form of proxy for use at the EGM is enclosed. To be valid, this form of proxy, together with the relevant power of attorney or other authority (if any) under which it is signed, or a certified copy thereof, must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time scheduled for holding the EGM or any adjournment thereof.

3. In case of joint holders of any Share, any one of such joint holders may vote at the EGM, either in person or by proxy, in respect of such Share as if he/she were solely entitled thereto. If more than one of such joint holders are present at the EGM in person or by proxy, the person so present whose name stands first in the register of members of the Company in respect of such Share shall alone be entitled to vote in respect of it.

4. Completion and return of the form of proxy will not preclude a member of the Company from attending the EGM and voting in person at the EGM or any adjournment thereof if he/she so wishes. If a member attends the EGM after having deposited the form of proxy, his/her form of proxy will be deemed to have been revoked.

— 9 —