Wang On Group Limited — Capital/Financing Update 2020

Oct 23, 2020

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.

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WANG ON GROUP LIMITED ( 宏安 集 團 有 限 公 司 )[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1222)

DISCLOSEABLE TRANSACTIONS DISPOSAL OF LISTED SECURITIES

THE DISPOSALS

The Board announces the following:

• (a) During the period from 9 July 2020 to 22 October 2020, the Company conducted a series of on-market transactions to dispose of an aggregate of 199,400 Alibaba Shares (representing approximately 0.0009% of the total issued Alibaba Shares as at the date of this announcement) at the selling price between HK$249.0 to HK$300.8 per Alibaba Share for an aggregate consideration of approximately HK$53.6 million (exclusive of transaction costs).

• (b) During the period from 9 July 2020 to 22 October 2020, the Company conducted a series of on-market transactions to dispose of an aggregate of 3,186,000 Xiaomi Shares (representing approximately 0.013% of the total issued Xiaomi Shares as at the date of this announcement) at the selling price between HK$16.68 to HK$23.6 per Xiaomi Share for an aggregate consideration of approximately HK$60.8 million (exclusive of transaction costs).

• (c) During the period from 26 June 2020 to 22 October 2020, the Company conducted a series of on-market transactions to dispose of an aggregate of 331,000 Meituan Shares (representing approximately 0.0056% of the total issued Meituan Shares as at the date of this announcement) at the selling price between HK$175.2 to HK$271.2 per Meituan Share for an aggregate consideration of approximately HK$66.6 million (exclusive of transaction costs).

• For identification purpose only

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LISTING RULES IMPLICATIONS

As each of (a) the Alibaba Share Disposals; (b) the Xiaomi Share Disposals; and (c) the Meituan Share Disposals, took place within 12-month period, each of (i) the Alibaba Share Disposals; (ii) the Xiaomi Share Disposals; and (iii) the Meituan Share Disposals, shall be aggregated as a single series of transactions under Rule 14.22 of the Listing Rules.

As one or more of the applicable percentage ratios calculated in accordance with Rule 14.07 of the Listing Rules in respect of each of (a) the Alibaba Share Disposals; (b) the Xiaomi Share Disposals; and (c) the Meituan Share Disposals, exceed 5% but all of them are less than 25%, each of (i) the Alibaba Share Disposals; (ii) the Xiaomi Share Disposals; and (iii) the Meituan Share Disposals, constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements under the Listing Rules.

THE DISPOSALS

The Board announces the following:

(1) the Alibaba Share Disposals

During the period from 9 July 2020 to 22 October 2020, the Company conducted a series of on-market transactions to dispose of an aggregate of 199,400 Alibaba Shares (representing approximately 0.0009% of the total issued Alibaba Shares as at the date of this announcement) at the price between HK$249.0 to HK$300.8 per Alibaba Share for an aggregate consideration of approximately HK$53.6 million (exclusive of transaction costs).

As the Alibaba Share Disposals were conducted through the sales in open market, the Company is not aware of the identities of the purchasers. To the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, each of the purchasers and their ultimate beneficial owners are third parties independent of the Company and its connected persons.

Assets disposed of

The Company disposed of a total of 199,400 Alibaba Shares at a selling price between HK$249.0 to HK$300.8 per Alibaba Share. Before the Alibaba Share Disposals, the Company held a total of 276,400 Alibaba Shares, representing approximately 0.0013% of the total issued share capital of Alibaba as at the date of this announcement. After the Alibaba Share Disposals, the Company will hold 77,000 Alibaba Shares, representing approximately 0.0004% of the total issued share capital of Alibaba as at the date of this announcement.

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Consideration

The aggregate gross sale proceeds of the Alibaba Share Disposals was HK$53.6 million (exclusive of transaction costs), which was/is receivable in cash on settlement. The consideration for the Alibaba Share Disposals represented the market price of the Alibaba Shares at the time of the Alibaba Share Disposals.

Information of Alibaba

According to publicly available information, Alibaba is a company incorporated in the Cayman Islands and the shares of which are listed on the Stock Exchange (stock code: 9988). Alibaba provides the technology infrastructure and marketing reach to help merchants, brands and other businesses to leverage the power of new technology to engage with their users and customers and operate in a more efficient way. Alibaba operates four principal business segments, namely core commerce, cloud computing, digital media and entertainment, and innovation initiatives. The core commerce segment provides China retail, China wholesale, international retail, international wholesale, Cainiao logistics services and local consumer services through Taobao Marketplace and Tmall. The cloud computing segment provides complete suite of cloud services, including database, storage, network virtualization services, big data analytics and others. The digital media and entertainment segment provides consumer services beyond the core business operations. The innovation initiatives and others segment is to innovate and deliver new services and products.

Set out below is the financial information of Alibaba for the two financial years ended 31 March 2019 and 2020 extracted from the prospectus of Alibaba dated 15 November 2019 and the annual report of Alibaba for the year ended 31 March 2020:

	For the	For the
	year ended	year ended
	31 March 2020	31 March 2019
	(RMB’million)	(RMB’million)
	(audited)	(audited)
Revenue	509,711	376,844
Net income after tax	140,350	80,234
Net income attributable to ordinary
shareholders	149,263	87,600
	As at	As at
	31 March 2020	31 March 2019
	(RMB’million)	(RMB’million)
	(audited)	(audited)
Total equity	870,548	608,583

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(2) the Xiaomi Share Disposals

During the period from 9 July 2020 to 22 October 2020, the Company conducted a series of on-market transactions to dispose of an aggregate of 3,186,000 Xiaomi Shares (representing approximately 0.013% of the total issued Xiaomi Shares as at the date of this announcement) at the price between HK$16.68 to HK$23.6 per Xiaomi Share for an aggregate consideration of approximately HK$60.8 million (exclusive of transaction costs).

As the Xiaomi Share Disposals were conducted through the sales in open market, the Company is not aware of the identities of the purchasers. To the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, each of the purchasers and their ultimate beneficial owners are third parties independent of the Company and its connected persons.

Assets disposed of

The Company disposed of a total of 3,186,000 Xiaomi Shares at a selling price between HK$16.68 to HK$23.6 per Xiaomi Share. Before the Xiaomi Share Disposals, the Company held a total of 4,212,200 Xiaomi Shares, representing approximately 0.017% of the total issued share capital of Xiaomi as at the date of this announcement. After the Xiaomi Share Disposals, the Company will hold 1,026,200 Xiaomi Shares, representing approximately 0.004% of the total issued share capital of Xiaomi as at the date of this announcement.

Consideration

The aggregate gross sale proceeds of the Xiaomi Share Disposals was HK$60.8 million (exclusive of transaction costs), which was/is receivable in cash on settlement. The consideration for the Xiaomi Share Disposals represented the market price of the Xiaomi Shares at the time of the Xiaomi Share Disposals.

Information of Xiaomi

According to publicly available information, Xiaomi is a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange (stock code: 1810). Xiaomi and its subsidiaries are principally engaged in development and sales of smartphones, internet of things and lifestyle products, provision of internet services and investment holding in the PRC and other countries or regions.

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Set out below is the financial information of Xiaomi for the two financial years ended 31 December 2018 and 2019 and six months ended 30 June 2020 extracted from the annual report of Xiaomi for the year ended 31 December 2019 and the interim report for the six months ended 30 June 2020:

		For the	For the
		year ended	year ended
	31	December 2019	31 December 2018
		(RMB’million)	(RMB’million)
		(audited)	(audited)
Revenue		205,839	174,915
Profit before income tax		12,163	13,927
Profit for the year		10,103	13,478
	As at	As at	As at
	30 June	31 December	31 December
	2020	2019	2018
	(RMB’million)	(RMB’million)	(RMB’million)
	(unaudited)	(audited)	(audited)
Total equity	90,162	81,658	71,250

(3) the Meituan Share Disposals

During the period from 26 June 2020 to 22 October 2020, the Company conducted a series of on-market transactions to dispose of an aggregate of 331,000 Meituan Shares (representing approximately 0.0056% of the total issued Meituan Shares as at the date of this announcement) at the price between HK$175.2 to HK$271.2 per Meituan Share for an aggregate consideration of approximately HK$66.6 million (exclusive of transaction costs).

As the Meituan Share Disposals were conducted through the sales in open market, the Company is not aware of the identities of the purchasers. To the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, each of the purchasers and their ultimate beneficial owners are third parties independent of the Company and its connected persons.

Assets disposed of

The Company disposed of a total of 331,000 Meituan Shares at a selling price between HK$175.2 to HK$271.2 per Meituan Share. Before the Meituan Share Disposals, the Company held a total of 399,800 Meituan Shares, representing approximately 0.0068% of the total issued share capital of Meituan as at the date of this announcement. After the Meituan Share Disposals, the Company will hold 68,800 Meituan Shares, representing approximately 0.0012% of the total issued share capital of Meituan as at the date of this announcement.

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Consideration

The aggregate gross sale proceeds of the Meituan Share Disposals was/is HK$66.6 million (exclusive of transaction costs), which was receivable in cash on settlement. The consideration for the Meituan Share Disposals represented the market price of the Meituan Shares at the time of the Meituan Share Disposals.

Information of Meituan

According to publicly available information, Meituan is a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange (stock code: 3690). Meituan is China ’ s leading e-commerce platform for services. It provides a platform using technology to connect consumers and merchants and offering diversified daily services, including food delivery, in-store dining, hotel and travel booking and other services.

Set out below is the financial information of Meituan for the two financial years ended 31 December 2018 and 2019 and six months ended 30 June 2020 extracted from the annual report of Meituan for the year ended 31 December 2019 and the interim report for the six months ended 30 June 2020:

			For the
		For the	year ended
		year ended	31 December
	31	December 2019	2018
		(RMB’million)	(RMB’million)
		(audited)	(audited)
Revenue		65,526	47,012
Profit/(loss) before income	tax	2,762	(115,491)
Profit/(loss) after taxation		2,236	(115,493)
	As at	As at	As at
	30 June	31 December	31 December
	2020	2019	2018
	(RMB’million)	(RMB’million)	(RMB’million)
	(unaudited)	(audited)	(audited)
Total equity	95,003	92,054	86,510

USE OF PROCEEDS OF THE DISPOSALS

The Company intends to use the net proceeds of approximately HK$180.7 million from the Disposals for general working capital of the Group.

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REASONS FOR AND BENEFITS OF THE DISPOSALS

The Disposals enable the Company to realise its investment in each of the Disposed Shares. As a result of the Disposals, the Company is expected to recognise a gain of approximately HK$68.9 million which is calculated based on the difference between the original acquisition prices and the selling prices of the Disposed Shares and the gain would be recognised as an increase in other comprehensive income. The actual amount of gain or loss as a result of the Disposals to be recorded by the Company will be subject to the review and final audit by the auditor of the Company.

INFORMATION OF THE GROUP

The Group is principally engaged in (a) management and sub-licensing of fresh markets and treasury management in Hong Kong and the PRC; (b) property investment and property development in Hong Kong through its 75%-owned listed non wholly-owned subsidiary, Wang On Properties Limited (stock code: 1243); (c) manufacturing and/or retailing of pharmaceutical and health food products through its 58.08%-owned listed non wholly-owned subsidiary, WYT; and (d) management and sales of properties in agricultural produce exchange markets in the PRC through China Agri-Products Exchange Limited (stock code: 0149), 53.37%-owned listed non wholly-owned subsidiary of WYT.

The Disposals were made at market prices and the Board is of the view that the Disposals will enhance the liquidity of the Company and was fair and reasonable and is on normal commercial terms and is in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As each of (a) the Alibaba Share Disposals; (b) the Xiaomi Share Disposals; and (c) the Meituan Share Disposals, took place within 12-month period, each of (i) the Alibaba Share Disposals; (ii) the Xiaomi Share Disposals; and (iii) the Meituan Share Disposals shall be aggregated as a single series of transactions under Rule 14.22 of the Listing Rules.

As one or more of the applicable percentage ratios calculated in accordance with Rule 14.07 of the Listing Rules in respect of each of (a) the Alibaba Share Disposals; (b) the Xiaomi Share Disposals; and (c) the Meituan Share Disposals, exceed 5% but all of them are less than 25%, each of (i) the Alibaba Share Disposals; (ii) the Xiaomi Share Disposals; and (iii) the Meituan Share Disposals, constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements under the Listing Rules.

DEFINITIONS

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

‘‘ Alibaba ’’

Alibaba Group Holding Limited, a company incorporated in the Cayman Islands and the shares of which are listed on the Stock Exchange (stock code: 9988)

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‘‘ Alibaba Share(s) ’’ ordinary share(s) with a par value US$0.000003125 (each) in the capital of Alibaba ‘‘ Alibaba Share Disposals ’’ the disposal by the Company of an aggregate of 199,400 Alibaba Shares through a series of transactions in the open market during the period from 9 July 2020 to 22 October 2020 for an aggregate consideration of approximately HK$53.6 million (exclusive of transaction costs) ‘‘ Board ’’ the board of Directors ‘‘ Company ’’ Wang On Group Limited, an exempted company incorporated in Bermuda with limited liability and the Shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 1222) ‘‘ connected person ’’ has the meaning ascribed thereto under the Listing Rules ‘‘ Disposals ’’ collectively, the Alibaba Share Disposals, the Meituan Share Disposals and the Xiaomi Share Disposals ‘‘ Disposed Shares ’’ collectively, the Alibaba Shares, the Meituan Shares and the Xiaomi Shares under the Disposals ‘‘ Director(s) ’’ the director(s) of the Company ‘‘ Group ’’ the Company and its subsidiaries ‘‘ HK$ ’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘ Hong Kong ’’ the Hong Kong Special Administrative Region of the People ’ s Republic of China ‘‘ Listing Rules ’’ the Rules Governing the Listing of Securities on the Stock Exchange ‘‘ Meituan ’’ Meituan, a company incorporated in the Cayman Islands and the shares of which are listed on the Stock Exchange (stock code: 3690) ‘‘ Meituan Share(s) ’’ ordinary share(s) of US$0.00001 (each) in the share capital of Meituan ‘‘ Meituan Share Disposals ’’ the disposal by the Company of an aggregate of 331,000 Meituan Shares through a series of transactions in the open market during the period from 26 June 2020 to 22 October 2020 for an aggregate consideration of approximately HK$66.6 million (exclusive of transaction costs)

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‘‘PRC’’	the People’s Republic of China, which for the purpose of
	this announcement, shall exclude Hong Kong, the Macau
	Special Administrative Region of the People’s Republic of
	China and Taiwan
‘‘RMB’’	Renminbi, the lawful currency of the People’s Republic of
	China
‘‘Share(s)’’	the ordinary share(s) of HK$0.01 each in the issued share
	capital of the Company
‘‘Shareholders’’	the holders of Shares
‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited
‘‘subsidiary(ies)’’	has the meaning ascribed thereto under the Companies
	Ordinance (Chapter 622 of the Laws of Hong Kong)
‘‘US$’’	United States dollars, the lawful currency of the United
	States of America
‘‘Xiaomi’’	Xiaomi Corporation, a company incorporated in the Cayman
	Islands and the shares of which are listed on the Stock
	Exchange (stock code: 1810)
‘‘Xiaomi Share(s)’’	ordinary share(s) with a par value of US$0.0000025 (each)
	in the share capital of Xiaomi
‘‘Xiaomi Share Disposals’’	the disposal by the Company of an aggregate of 3,186,000
	Xiaomi Shares through a series of transactions in the open
	market during the period from 9 July 2020 to 22 October
	2020 for an aggregate consideration of approximately
	HK$60.8 million (exclusive of transaction costs)
‘‘WYT’’	Wai Yuen Tong Medicine Holdings Limited, an exempted
	company incorporated in Bermuda with limited liability and
	the shares of which are listed and traded on the Main Board
	of the Stock Exchange (stock code: 897)
‘‘%’’	per cent.

By Order of the Board WANG ON GROUP LIMITED (宏安集 團 有限公 司 )[*] Chan Chun Hong, Thomas Managing Director

Hong Kong, 22 October 2020

• For identification purpose only

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As at the date of this announcement, the Board comprises three executive Directors, namely Mr. Tang Ching Ho, Ms. Yau Yuk Yin and Mr. Chan Chun Hong, Thomas and three independent non-executive Directors, namely Mr. Wong Chun, Justein, Mr. Siu Kam Chau and Mr. Chan Yung.

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