WH Group Limited — Capital/Financing Update 2021

Jun 8, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) 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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China Baoli Technologies Holdings Limited 中國寶力科技控股有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 164)

VOLUNTARY ANNOUNCEMENT LATEST BUSINESS DEVELOPMENT

This announcement is made by the board (the “ Board ”) of directors (the “ Director(s) ”) of China Baoli Technologies Holdings Limited (the “ Company ”, together with its subsidiaries, the “ Group ”) on a voluntary basis. This announcement is to provide the shareholders and other potential investors of the Company with the information on the latest business development of the Group.

The Board is pleased to announce that on 8 June 2021, Baoli Youta (Shanghai) Communication Technology Co., Ltd. (寶力優塔（上海）通訊科技有限公司)(“ Baoli Youta ”), a subsidiary of the Group, entered into a business collaboration with Chun Mian Network Technology (Shanghai) Co., Ltd.（純免網絡科技（上海）有限公司) (“ Chun Mian Network 純免網絡 ”) to jointly establish a joint venture, i.e. Shanghai Chun Mian Di Fu International Trade Co., Ltd. (上海純免遞福國際貿易有限公司) (the “ JV Company ”), in the People’s Republic of China (“ PRC* ”). Leveraging on the Group’s train media and advertising resources and its strong multi-media technologies knowhow, the Group and the JV Company will conduct a series of cooperation and exploration in convergence media digital advertising and marketing business, innovatively integrate the emerging online shopping trend in cross-border duty-free e-commerce industry on the train media platform and to interact with the train patronage through mobile online-media marketing, influencer/KOL live streaming and others. The Group aims to expand its scale of convergence media business via the new online/offline duty-free importing e-commerce marketing platform services.

Upon incorporation, the Group will hold as to 40% of the JV Company and will become the single largest shareholder of the JV Company. The JV Company will be an associate of the Group.

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INTRODUCTION OF MARKET BACKGROUND

According to the preliminary statistics of China customs, the import and export of crossborder e-commerce amounted to RMB1.69 trillion for 2020 in the PRC, representing a year-on-year increase of 31.1%. Against the backdrop of the global pandemic, this emerging trading trend has become a highlight and an important force to drive domestic demands and stabilize foreign trade, which will further contribute to the establishment of “dual circulation” growth development policy.

In particular, imports under the duty-free cross-border e-commerce (customs regulation code: 1210) (the “ 1210 Model ”) flourished, whose business amount accounted for over 80% of cross-border e-commerce retail import.

On 22 March 2021, six departments and committees under the State Council jointly promulgated a notice to further increase pilot bases for cross-border e-commerce retail import, specifying that the scope of pilot bases is expanded to all free trade pilot zone, cross-border e-commerce general pilot zone, general duty-free zone, presentation zone of import trade promotion and innovation as well as the cities (and areas) where duty-free logistic centers (B level) are located. It was further specified that the relevant cities (areas) can conduct duty-free online shopping import business once compliance is met with the local customs.

With the support of the national policies, the bulk bonded-import goods under the 1210 Model can substantially lower the operating costs for importing enterprises. With respect to consumers, the growth of cross-border e-commerce will also help lower the purchasing prices of foreign quality goods.

As such, the 1210 Model presents a good and promising growth opportunity from the perspectives of policy, enterprise and consumer.

INFORMATION ON THE JV COMPANY

The JV Company will leverage on the competitive advantages of each party.

The Group will fully utilize its strengths in Guangdong-Hong Kong-Macao Greater Bay Area train media resources and its edge of convergence media advertising and marketing business platform to further expand its scope of multi-media technologies businesses.

Currently, only 160 million citizens in China hold passports. A large number of citizens have never been abroad, but have the willingness and consumption ability to purchase famous consumer products and luxuries. In the past, such group of people bought a lot of parallel imports and counterfeit consumer goods through Wechat agents, overseas online shopping, cross-border and e-commerce platforms. These people are the target customers of Chun Mian Network 純免網絡. Through the pilots, Chun Mian Network 純免網

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絡 serves these customers with low-cost genuine products. This will help combat illegal parallel imports and overseas online shopping and to comply with the national regulatory requirements.

Chun Mian Network 純免網絡 is exclusively authorized by China Duty Free Shop (Hong Kong) Group Co., Limited (CDFS) (中國免稅店（香港）集團公司) to conduct cross-border duty-free businesses in China. It has also filed with the General Administration of Customs (the “ Customs ”) to independently develop and connect enterprise resource planning and 1210 payment reporting system of bonded import goods, and the establishment of dutyfree experience stores and other businesses. The current operation of cross-border duty-free platform for genuine authentic products is authorized by the Customs on a pilot basis under the innovative business model of cross-border duty-free and direct mail in comprehensive bonded areas. Tax refund after tax payment is implemented. Tax payable is prepaid on behalf of the consumer in the form of deposit deduction from the bank supervision account designated by the customs, and the tax refund approval is obtained from the customs and the local tax bureau according to regulations.

Chun Mian Network 純免網絡 has cooperated with Dutyfree List and connected to more than 80 airport duty-free shops around the world. Consumers may purchase global famousbrand duty-free goods and local goodies from global airports with only their identity cards without leaving their homes, and the platform is automatically connected directly to the Customs to identify the personal annual quota usage of consumers with identity cards.

The JV Company will fully utilize the competitive advantages of all the parties in order to create additional business growth. The Group will explore new opportunities to cooperate with international brands in convergence media through its strong supply chain resources of international first-line cosmetics, fashion brands, and light luxury products owned by Chun Mian Network 純免網絡, while exploring and expanding the online/offline e-commerce marketing business of the Group.

It is anticipated that with the developing of the JV Company’s business, the Group will further release its own powerful media resource network to enhance business promotion and growth, including the large-scale multi-media marketing in outdoor landscape, (mobile) internet media marketing, marketing in the influencer/KOL live streaming platform, etc.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, as at the date of this announcement, the other shareholders of the JV Company and their ultimate beneficial owners are independent of the Company and connected persons of the Company.

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REASONS AND BENEFITS OF THE FORMATION OF THE JV COMPANY

First of all, in light of the on-going impact on the global economy due to COVID-19 pandemic and the variation of the virus, it is estimated that it will be difficult for the global aviation industry to recover to its historical level in the near future. It is expected that, the continuous travel demand would change from international travelling to domestic travelling. Other than airlines, high-speed railway is the most frequently-used travelling transportation in mainland China. The annual patronage of railway amounted to over 100 million passengers in the Guangdong-Hong Kong-Macau Greater Bay Area. Under the pandemic, it is estimated that there would be a significant increase in such passenger flow, which would be substantially conducive to the expansion of the Group’s high-speed railway convergence media platform business.

In addition, with the support from the comprehensive consumption promotion and domestic circulation policies proposed by the 14th Five-Year Plan, demand for dutyfree commodities will be further driven by strong demand and domestic consumptions for branded products. It is estimated that the sales of domestic duty-free commodities will amount to RMB355.4 billion by 2025, indicating a promising future for duty-free products. The JV Company has strong strategic value as not only Chun Mian Network 純 免網絡 is the exclusive operator in mainland China authorized by China Duty Free Shop (Hong Kong) Group Co., Limited (CDFS) to engage in cross-border e-commerce bonded import goods, establishment of duty-free experience stores and other businesses, but also it has strong partnerships with many world renowned duty-free groups and supply chain companies.

With the current macro-environment, market and policy circumstances, the Directors are of the view that the formation of the JV Company will provide an excellent opportunity for the Group’s development. The JV Company will not only bring commercial opportunities for online/offline e-commerce marketing business, but also help further expansion of the Group’s convergence media and advertising business. The JV Company can create a synergetic and amplifying effect for the Group’s convergence media technology business, generate additional operating revenue and improve the Group’s profitability to deliver long-term benefits to the Group and its shareholders.

Accordingly, the Directors believe that the formation of the JV Company will be in the interest of the Group and its shareholders as a whole.

LISTING RULES IMPLICATIONS

As each of the applicable percentage ratios (as defined under the Listing Rules) calculated under Rule 14.07 of the Listing Rules in respect of the formation of the JV Company does not exceed 5%, the formation of the JV Company does not constitute a notifiable transaction under Chapter 14 of the Listing Rules. This announcement is made by the Company on a voluntary basis.

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RISK WARNING

Shareholders and potential investors are advised to exercise caution in dealing in the shares of the Company.

By order of the Board China Baoli Technologies Holdings Limited Zhang Yi Chairman

Hong Kong, 8 June 2021

As at the date of this announcement, the executive directors of the Company are Mr. Zhang Yi (Chairman), Ms. Chu Wei Ning (Chief Executive Officer) and Ms. Lam Sze Man; and the independent non-executive directors are Mr. Chan Fong Kong, Francis, Mr. Chan Kee Huen, Michael and Mr. Feng Man.

• For identification purpose

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