WH Group Limited — Proxy Solicitation & Information Statement 2024

Sep 20, 2024

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Baoli Technologies Holdings Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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China 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)

ISSUE OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE IN RELATION TO THE SETTLEMENT AGREEMENT AND NOTICE OF SPECIAL GENERAL MEETING

Capitalised terms used in this cover page shall have the same meanings as those defined in this circular.

A notice convening the SGM to be held on Thursday, 10 October 2024 at 3:00 p.m. at Level 6, Infinitus Plaza, 199 Des Voeux Road Central, Sheung Wan, Hong Kong is set out on pages SGM-1 to SGM-3 of this circular and a form of proxy for the SGM is despatched together with this circular.

Whether or not you are able to attend the SGM, you are requested to complete, sign and return the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, at 17/ F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the enclosed form of proxy will not preclude you from attending and voting in person at such meeting or any adjournment meeting should you so wish.

A letter from the Board is set out on pages 5 to 34 of this circular.

20 September 2024

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
NOTICE OF SPECIAL GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . .	SGM-1

– i –

DEFINITIONS

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

• “2024 GM CB Holders”

• the holders of the convertible bonds issued in the aggregate principal amount of HK$6,000,000 on 25 July 2024, details of which are disclosed in the announcement of the Company dated 12 July 2024

• “Announcement”

• the announcement of the Company dated 14 August 2024

• “Board”

• the board of Directors

• “Bondholder(s)” anyone who holds the Convertible Bonds or any outstanding principal amount thereof for the time being and registered as the bondholder of the Convertible Bonds or any outstanding principal amount

• “Business Day(s)”

• any day(s) (other than Saturday and a day on which a typhoon signal no. 8 or above or black rainstorm signal is hoisted in Hong Kong between 9:00 a.m. to 5:00 p.m.) on which banks are generally open for business in Hong Kong

• “CB Instrument”

• the instrument to be executed by the Company in the form of a deed under and pursuant to which the Convertible Bonds are to be constituted and issued

• “Company”

• China Baoli Technologies Holdings Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on Main Board of the Stock Exchange

• “Completion”

the overall completion of the issue of the Convertible Bonds

• “connected person(s)”

• has the meaning ascribed to it under the Listing Rules

• “Conversion Date”

• the date on which the Company receives a duly completed and executed conversion notice from the Bondholder pursuant to the CB Instrument, which must be a Business Day within the Conversion Period

– 1 –

DEFINITIONS

• “Conversion Price”

• the initial conversion price of HK$11.9024 per Conversion Share, and the conversion price may be subject to such adjustment(s) as set out in the paragraph headed “Adjustments to the Conversion Price” in this circular, but in any event, the Conversion Price shall not be lower than the par value of each Share

• “Conversion Share(s)” the total number of 11,678,635 Shares to be allotted and issued by the Company at the Conversion Price upon exercising of the Conversion Rights attaching to the Convertible Bonds

• “Convertible Bond(s)” the convertible bonds in the principal amount of RMB128,370,000 (based on the Exchange Rate, equivalent to approximately HK$139,003,790) at an interest rate of 4% per annum with 5-year maturity convertible into the Convertible Shares in accordance with the CB Instrument

• “CQ Baoli Yota”

• Chongqing Baoli Yota Technologies Limited* （重慶寶力 優特科技有限公司）, was an indirect wholly-owned subsidiary of the Company, which was deconsolidated during the year ended 31 March 2022

• “CQ Zifeng” Chongqing Zifeng Business Partnership (Limited Partnership)* （重慶市梓峰商貿合夥企業（有限合夥）)

• “Director(s)”

• the director(s) of the Company

• “Enforcement Ruling”

• the enforcement ruling dated 8 August 2024 ordered by Chongqing First Intermediate People’s Court in relation to the Settlement Agreement

• “Exchange Rate” the exchange rate of every HK$100 to RMB92.35 (as defined in the CB Instrument)

• “First Issue Date”

• the initial date of issue of the Convertible Bonds under and pursuant to the terms and conditions contained in the CB Instrument

– 2 –

DEFINITIONS

“Group”

the Company and its subsidiaries from time to time

• “GM CB Holders” the holders of the convertible bonds issued in the aggregate principal amount of HK$12,000,000 on 29 August 2022, details of which are disclosed in the announcements of Company dated 1 August 2022, 17 August 2022 and 30 August 2022

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Latest Practicable Date” 13 September 2024, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Committee”

has the meaning as defined in the Listing Rules

• “Listing Rules”

• the Rules Governing the Listing of Securities on the Stock Exchange

• “PRC” The People’s Republic of China

• “Settlement Agreement” the settlement agreement dated 11 April 2024 (as supplemented by the Letter (as defined under the section headed “ THE SETTLEMENT AGREEMENT ”)) entered into among the Company, CQ Zifeng and CQ Baoli Yota in relation to the agreement to settle the Agreed Amount subject to certain terms contained therein and the CB Instrument

• “SGM” the special general meeting of the Company to be convened and held to consider and, if thought fit, approve the Settlement Agreement and the transactions contemplated thereunder, including the issue of the Convertible Bonds, the allotment and issue of the Conversion Shares, and the grant of the Specific Mandate

– 3 –

DEFINITIONS

“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of the Share(s) from time to time
“Specific Mandate”	the specific mandate to be granted by the Shareholders to
	the Board at the SGM for the allotment and issue of the
	Conversion Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Code on Takeovers and Mergers and Share Buy-backs
	published by the Securities and Futures Commission of
	Hong Kong
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“%”	per cent.

• For identification purpose only

– 4 –

LETTER FROM THE BOARD

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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)

Executive Directors: Mr. Wang Bin (Chairman) Mr. Zhang Yi (Vice Chairman) Ms. Chu Wei Ning (Chief Executive Officer) Ms. Lam Sze Man

Registered office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Independent non-executive Directors: Mr. Chan Fong Kong, Francis Mr. Chan Kee Huen, Michael Mr. Feng Man

Principal place of business in Hong Kong: Suites 3706-3708, 37/F Dah Sing Financial Centre 248-256 Queen’s Road East Wanchai Hong Kong

20 September 2024

To the Shareholders,

Dear Sir/Madam,

ISSUE OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE IN RELATION TO THE SETTLEMENT AGREEMENT

AND NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement regarding issue of Convertible Bonds under Specific Mandate in relation to the Settlement Agreement.

The purpose of this circular is to provide you with information in respect of, among other things, (i) further details of the issue of the Convertible Bonds; and (ii) a notice convening the SGM.

– 5 –

LETTER FROM THE BOARD

THE SETTLEMENT AGREEMENT

As disclosed in the annual report of the Company for the year ended 31 March 2024, an amount of RMB138,022,000 (equivalent to HK$147,744,000) which was mature on 27 March 2019, unsecured and carries interest rate of the People’s Bank of China Benchmark Rate was due to a creditor (i.e. CQ Zifeng). After negotiation, on 11 April 2024, the Group (i.e. the Company and CQ Baoli Yota) entered into the Settlement Agreement with CQ Zifeng, pursuant to which the Company, CQ Baoli Yota and CQ Zifeng have agreed to settle the Agreed Amount (as defined in the paragraph headed “ Principal terms of the Settlement Agreement ” below) by, inter alia, the issue of the Convertible Bonds to CQ Zifeng subject to the approval from the Chongqing First Intermediate People’s Court (the “ Chongqing Court ”). On 13 August 2024, the Group received the Enforcement Ruling from the Chongqing Court affirming the Settlement Agreement.

Date

11 April 2024

Parties

• (i) CQ Zifeng, as the Bondholder of the Convertible Bonds upon Completion;

• (ii) CQ Baoli Yota; and

• (iii) The Company, as the issuer

(collectively, the “ Parties ”)

As at the Latest Practicable Date, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, CQ Zifeng and its ultimate beneficial owner are third parties independent of and not connected with the Company and its connected persons.

– 6 –

LETTER FROM THE BOARD

Principal terms of the Settlement Agreement

The principal terms of the Settlement Agreement are, inter alia, as follows:

• (i) the Parties mutually confirmed that as at 10 July 2024, CQ Baoli Yota and the Company shall together repay CQ Zifeng the loan in the principal amount of RMB100,000,000 and the interests of RMB29,170,000, amounting to RMB129,170,000 in total (the “ Agreed Amount ”).

• (ii) the Parties mutually agreed that the Agreed Amount above shall be converted into the Convertible Bonds in the aggregate principal amount of RMB128,370,000;

• (iii) the Parties agreed that prior to full payment of the principal amount and interests of the Convertible Bonds as mentioned in sub-paragraph (ii) above, or CQ Zifeng has not exercised the conversion rights attaching to the Convertible Bonds, CQ Baoli Yota and the Company shall still bear the joint liability for the outstanding principal amount and interests as agreed under the Settlement Agreement;

• (iv) 7 business days after the signing of the Settlement Agreement, the Company or any entity designated by the Company shall pay CQ Zifeng a handling fee for entrusted loans of RMB200,000 and the first repayment (principal) of RMB800,000; and

• (v) the legal fees of approximately RMB2,010,000 based on the actual expenses (including arbitration fee of approximately RMB707,000, litigation fee of approximately RMB620,000 and legal adviser fee of approximately RMB682,000) incurred since 2019 shall be borne by the Company, and shall be repaid monthly over two years. The administration fee of approximately RMB197,000 will be first paid by CQ Zifeng and the Company shall reimburse the payment within one year.

After making enquiries with the Company’s PRC legal adviser, the Directors consider that the above legal fees of approximately RMB2,010,000 are fair and reasonable.

On 26 August 2024, pursuant to the principal term (i) of the Settlement Agreement as shown above, the Company and CQ Zifeng agreed in writing to supplement that in addition to the interest attached to the Convertible Bonds, interest shall also be calculated based on the total principal amount of RMB128,370,000 at 4% per annum during the period commencing on 10 July 2024 and ending on the First Issue Date, which shall be payable on the Maturity Date (the “ Letter ”).

– 7 –

LETTER FROM THE BOARD

PRINCIPAL TERMS OF THE CONVERTIBLE BONDS

Upon the execution of the Settlement Agreement, both CQ Zifeng and the Company are required to promptly proceed with their respective registration and approval processes. The Company shall obtain, inter alia , approval from the Stock Exchange and the Shareholders’ approval. CQ Zifeng shall obtain the necessary approvals from relevant regulatory and governmental authorities.

As at the Latest Practicable Date, CQ Zifeng has obtained the Enforcement Ruling from the Chongqing Court affirming the Settlement Agreement. The Company will apply for the listing of and permission to deal in the Conversion Shares, and the SGM will be held to approve the Settlement Agreement and the transactions contemplated thereunder (including the issue of the Convertible Bonds, the allotment and issue of the Conversion Shares and the grant of the Specific Mandate) by the Shareholders. Save for the abovementioned, there is no other statutory approvals for the Company and CQ Zifeng to obtain.

Set out below are the principal terms of the Convertible Bonds:

Issuer: The Company Principal amount: RMB128,370,000 (based on the Exchange Rate, equivalent to HK$139,003,790) Maturity date: The date (if such day is not a Business Day, then on the next Business Day which immediately follows) which falls on the fifth anniversary of the First Issue Date (the “ Maturity Date ”).

Denomination The Convertible Bonds shall be issued at the face value of RMB128,370,000 (based on the Exchange Rate, equivalent to HK$139,003,790). Conversion, redemption or repayment of any principal amount of the Convertible Bonds shall be RMB500,000 or a multiple thereof.

The Company shall compensate the Bondholders by payment of cash in Hong Kong Dollars in an amount equal to the amount of the non-convertible principal amount outstanding.

– 8 –

LETTER FROM THE BOARD

Interest:

4% per annum (the “ Interest ”), the Company is required to pay the Interest semi-annually starting from six months after the first anniversary of the First Issue Date, the accrued Interest of the 1st year shall be paid evenly over the 2nd year to the 4th year and the last interest payment shall be on the Maturity Date.

The interest rate of 4% per annum was arrived at after arm’s length negotiations between the Company and CQ Zifeng with reference to the then prevailing 5-year Loan Prime Rate （貸款市場報價利率） of 4.2% calculated by The National Interbank Funding Center （全國銀行間同業拆借中心） as published by The People’s Bank of China in the material period before finalising the term of the interest rate in the Settlement Agreement. The Directors consider that the Interest is fair and reasonable.

The schedules of payment of the Interest and the respective amounts are as follows:

Date of payment of the Interest (the “Relevant Date”)

Six months after the 1[st] anniversary of the First Issue Date

The 2[nd] anniversary of the First Issue Date

Six months after the 2[nd] anniversary of the First Issue Date

The 3[rd] anniversary of the First Issue Date

Six months after the 3[rd] anniversary of the First Issue Date

Amount of Interest to be paid

RMB3,323,200 (based on the Exchange Rate, equivalent to HK$3,598,484)

RMB3,323,200 (based on the Exchange Rate, equivalent to HK$3,598,484)

RMB3,123,200 (based on the Exchange Rate, equivalent to HK$3,381,917)

RMB3,123,200 (based on the Exchange Rate, equivalent to HK$3,381,917)

RMB2,823,200 (based on the Exchange Rate, equivalent to HK$3,057,066)

– 9 –

LETTER FROM THE BOARD

The 4[th] anniversary of the RMB2,823,200 (based on the First Issue Date) Exchange Rate, equivalent to HK$3,057,066) Six months after the 4[th] RMB1,567,400 (based on the anniversary of the First Issue Exchange Rate, equivalent to Date HK$1,697,239 The Maturity Date RMB1,567,400 (based on the Exchange Rate, equivalent to HK$1,697,239

The Company shall pay the Interest to the Bondholders in cash.

Subject to the other conditions contained in the CB Instrument, in the case that the Company fails to pay the Interest in full on the Relevant Date, if such outstanding part thereof is lower than 30% of the amount required to be paid, then the Company may pay this amount which shall have been paid but have not been paid within three months after the Relevant Date, provided that the Company shall pay the Interest that shall be paid on the Maturity Date in full and on time without extension and all interest remaining unpaid on the Relevant Date must also be paid in full and on time without further extension. In the event that the Company fails to pay the relevant Interest which shall have been paid but have not been paid within three months after the Relevant Date, or the Interest which shall have been paid but have not been paid on the Relevant Date is more than 30% of the Interest which shall be paid on the Relevant Dates, or the Company fails to pay all the Interest on the Maturity Date, then it shall constitute an event of default and must be dealt with in accordance with the relevant provisions set out in the CB Instrument.

– 10 –

LETTER FROM THE BOARD

Conversion Price:

The initial Conversion Price of HK$11.9024 per Conversion Share represents:

• (i) a premium of approximately 3,206.22% over the closing price of HK$0.360 per Share as quoted on the Stock Exchange as at the Latest Practicable Date;

• (ii) a premium of approximately 2,025.43% over the closing price of HK$0.560 per Share as quoted on the Stock Exchange as at the date of the Announcement; and

• (iii) a premium of approximately 1,807.44% over the average closing price of HK$0.624 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the date of the Announcement.

The initial Conversion Price was arrived at after arm’s length negotiations between the Company and CQ Zifeng. The economy is gradually improving in the post-pandemic period. It is also expected that the Group’s businesses in convergence media, and dry grinding and dry beneficiation will experience growth in the future. Given the 5-year term of the Convertible Bonds, the Directors have used their best endeavour to secure favorable terms, inter alia, the initial Conversion Price with a substantial premium to reflect the Group’s future prospects. The Directors consider that the initial Conversion Price is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 11 –

LETTER FROM THE BOARD

Adjustments to the Conversion Price:

The Conversion Price shall be subject to adjustment in accordance with the CB Instrument after approval of independent accountant if, whilst any of the Convertible Bonds remains outstanding, any of the following events or circumstances in relation to the Shares shall occur:

• (a) Consolidation, subdivision or reclassification: If and whenever there shall be an alteration to the nominal value of the Shares as a result of consolidation, subdivision or reclassification, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such alteration by the following fraction:

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----- Start of picture text -----

A
B
----- End of picture text -----

where

A is the nominal value of one Share immediately after such alteration; and

B is the nominal value of one Share immediately before such alteration.

Such adjustment shall become effective from the day on which such consolidation, subdivision or reclassification becomes effective.

– 12 –

LETTER FROM THE BOARD

• (b) Capital distribution: If and whenever the Company shall pay or make any capital distribution (as specified pursuant to the CB Instrument) to the Shareholders, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such capital distribution by the following fraction:

A – B

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----- Start of picture text -----

A
----- End of picture text -----

where

A is the fair market value of one Share, as determined in good faith by the independent accountant or financial advisor (acting as an expert), on the day immediately preceding the date on which the capital distribution is made; and

B is the fair market value, as determined in good faith by the independent accountant or financial advisor (acting as an expert), of the portion of the capital distribution which is attributable to one Share on the date of such capital distribution.

Such adjustment shall become effective on the date of such capital distribution actually made by the Company.

– 13 –

LETTER FROM THE BOARD

• (c) Issue of Shares or issue/grant of any options, warrants or other rights to subscribe for or purchase Shares by way of rights issue: If and whenever the Company shall issue Shares to all or substantially all Shareholders (as a class) by way of rights, or shall issue or grant to all or substantially all Shareholders (as a class) by way of rights, any options, warrants or other rights to subscribe for or purchase any Shares, in each case at less than 95% of the average of the closing price of one Share as quoted for the last 5 trading days immediately prior to such issue or grant to Shareholders is made, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue or grant by the following fraction:

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where

A is the number of Shares in issue immediately before such issue or grant;

B is the number of Shares which the aggregate amount (if any) payable for the rights, or for the options or warrants or other rights issued by way of rights, and the total number of Shares comprised therein would purchase at such fair market value per Share; and

C is the aggregate number of Shares issued or, as the case may be, comprised in the grant.

Such adjustment shall become effective on the date of the issue of such Shares or issue or grant of such options, warrants or other rights (as the case may be).

– 14 –

LETTER FROM THE BOARD

• (d) Issue of other securities by way of rights issue: If and whenever the Company shall:

• (i) issue any securities (other than Shares or options, warrants or other rights to subscribe for or purchase Shares) to all or substantially all Shareholders (as a class) by way of rights; or

• (ii) grant to all or substantially all Shareholders (as a class) by way of rights any options, warrants or other rights to subscribe for or purchase any securities (other than Shares or options, warrants or other rights to subscribe for or purchase Shares),

the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue, grant or offer by the following fraction:

A – B A

where

A is the average of the closing price of one Share as quoted for the last 5 trading days immediately prior to the date of such issue or grant; and

B is the fair market value, as determined in good faith by the independent accountant or financial advisor (acting as an expert), of the portion of the rights which is attributable to one Share on the date of such grant.

Such adjustment shall become effective on the date of the issue of such securities or grant of such rights, options or warrants (as the case may be).

– 15 –

LETTER FROM THE BOARD

• (e) Issue of Shares other than by way of rights issue: If and whenever the Company shall wholly for cash:

• (i) issue (other than as mentioned in sub-paragraph (c) above) any Shares (other than the Shares issued upon the exercise of the Conversion Rights (as defined below) or upon the exercise of any other rights convertible or exchangeable or subscription for Shares); or

• (ii) issue or grant (other than as mentioned in subparagraph (c) above) options, warrants or other rights to subscribe for or purchase Shares,

in each case at a price per Share which is less than 95% of the average of the closing price of one Share as quoted for the last 5 trading days immediately prior to the date of such issue or grant, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue or grant by the following fraction:

A + B C

where

A is the number of Shares in issue immediately before the issue of such additional Shares;

B is the number of Shares which the aggregate consideration receivable for the issue of such additional Shares would purchase at such fair market value per Share; and

C is the number of Shares in issue immediately after the issue of such additional Shares.

– 16 –

LETTER FROM THE BOARD

References to additional Shares in the above formula shall, in the case of an issue or grant by the Company of options, warrants or other rights to subscribe for or purchase Shares, mean such Shares to be issued assuming that such options, warrants or other rights are exercised in full at the initial exercise price on the date of issue of such options, warrants or other rights.

Such adjustment shall become effective on the date of the issue of such Shares or (as the case may be) the issue or grant of such options, warrants or other rights.

• (f) Issue of Shares upon conversion: Except for issue of securities arising from the conversion of other securities pursuant to this sub-paragraph, if and whenever the Company shall issue wholly for cash any securities (except for the Convertible Bonds) which by their terms of issue carry rights of conversion into, or exchange or subscription for, Shares to be issued by the Company upon conversion, exchange or subscription, at a consideration per Share which is less than 95% of the average of the closing price of one Share as quoted for the last 5 trading days immediately prior to the date of the issue of such securities, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue by the following fraction:

A + B A + C

where

– 17 –

LETTER FROM THE BOARD

A is the number of Shares in issue immediately before such issue;

B is the number of Shares which the aggregate consideration receivable by the Company for the Shares to be issued upon conversion into or exchange of or upon exercise of the right of subscription attached to such securities would purchase at such fair market value per Share; and

C is the maximum number of Shares to be issued upon conversion into or exercise of the rights of subscription attached to such securities at the initial conversion, exchange or subscription price or rate.

Such adjustment shall become effective on the date of the issue of such securities.

• (g) Offers for Shares: If and whenever the Company or any of its subsidiaries shall issue, sell or distribute any securities in connection with an offer and pursuant to the conditions of such offer, the Shareholders generally (meaning for these purposes the holders of at least 60% of the Shares outstanding at the time such offer is made) are entitled to participate in arrangements in relation to such grant (except where the Conversion Price falls to be adjusted under subparagraphs (a) to (f) above), the Conversion Price shall be adjusted by multiplying the Conversion Price in force prior to such issue by the following fraction:

A – B

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----- Start of picture text -----

A
----- End of picture text -----

where

A is the average of the closing price of one Share as quoted for the last 5 trading days immediately prior to the date of such issue; and

– 18 –

LETTER FROM THE BOARD

B is the fair market value, as determined in good faith by the independent accountant or financial advisor (acting as an expert), of the portion of the rights attributable to one Share on the date of such granting arrangements.

Such adjustment shall become effective on the date of issue of such securities.

Conversion Shares:

In the case of the Conversion Rights having been exercised in full, a total number of 11,678,635 Conversion Shares will be allotted and issued by the Company upon full conversion of the Convertible Bonds at the initial Conversion Price of HK$11.9024 per Conversion Share, representing:

• (i) approximately 11.99% of the existing total number of issued Shares as at the Latest Practicable Date; and

• (ii) approximately 10.70% of the total number of issued Shares as enlarged by the allotment and issue of the Conversion Shares (assuming there is no other change in the total number of Shares in issue from the Latest Practicable Date and up to the date of full conversion of the Convertible Bonds).

The aggregate nominal value of 11,678,635 Conversion Shares is HK$116,786.35.

Conversion period:

The period commencing from the first Business Day after the First Issue Date and expiring on five Business Days immediately prior to the Maturity Date (both days inclusive) (the “ Conversion Period ”)

– 19 –

LETTER FROM THE BOARD

Conversion rights:

The Bondholder(s) shall have the right to convert the relevant principal amount held by them in aggregate of RMB128,370,000 (based on the Exchange Rate, equivalent to HK$139,003,790) (which shall be RMB500,000 or a multiple thereof) of the Convertible Bonds into Conversion Shares on the Conversion Date listed below in accordance with the CB Instrument as calculated by dividing the principal amount of the Convertible Bonds to be converted by the Conversion Price, which must be exercised within the Conversion Period (“ Conversion Rights ”).

Principal amount of the Convertible Outstanding Bonds to be principal amount Date of conversion converted after conversion On or before the 1[st] RMB5,000,000 RMB123,370,000 anniversary of the First (based on the (based on the Issue Date Exchange Rate, Exchange Rate, equivalent to equivalent to HK$5,414,185.20) HK$133,589,604.76) On or before the 2[nd] RMB10,000,000 RMB113,370,000 anniversary of the First (based on the (based on the Issue Date Exchange Rate, Exchange Rate, equivalent to equivalent to HK$10,828,370.32) HK$122,761,234.43) On or before the 3[rd] RMB15,000,000 RMB98,370,000 anniversary of the First (based on the (based on the Issue Date Exchange Rate, Exchange Rate, equivalent to equivalent to HK$16,242,555.50) HK$106,518,678.94)

– 20 –

LETTER FROM THE BOARD

On or before the 4[th ] RMB20,000,000 RMB78,370,000 anniversary of the First (based on the (based on the Issue Date Exchange Rate, Exchange Rate, equivalent to equivalent to HK$21,656,740.70) HK$84,861,938.28) On or before the 5[th] RMB78,370,000 RMB0 (based on the anniversary of the First (based on the Exchange Rate, Issue Date Exchange Rate, equivalent to HK$0) equivalent to HK$84,861,938.28)

Conversion restrictions:

No Bondholder shall exercise any Conversion Rights and the Company shall not be required to issue any Conversion Share in the event that the exercise of such Conversion Rights by the Bondholder will cause: (1) the Bondholder and/or parties acting in concert with it being required by regulatory authority to make a mandatory general offer for the Shares held by the other Shareholders in accordance with the Takeovers Code, unless the Bondholder undertakes to the Company to fully comply with all applicable requirements under the Takeovers Code; and/or (2) the public float of the Company being less than 25% of its issued share capital.

– 21 –

LETTER FROM THE BOARD

Redemption before maturity: Unless the Bondholder(s) have converted the relevant principal amount they hold into the Conversion Shares within the relevant conversion period in accordance with the sequence and the relevant principal amount set out in the paragraph headed “Conversion rights” above, the Company must redeem a total of RMB50,000,000 (based on the Exchange Rate, equivalent to HK$54,141,851.72) before the Maturity Date in accordance with the sequence, terms and conditions set out below or the relevant principal amount the Bondholder(s) have not exercised the Conversion Rights in accordance with the paragraph headed “Conversion rights” above (i.e. deducting the relevant principal amount the Bondholder(s) has been converted into Conversion Shares in accordance with the paragraph headed “Conversion rights” above from RMB50,000,000 (based on the Exchange Rate, equivalent to HK$54,141,851.72)) (whichever is appropriate), to redeem the relevant principal portion of the Convertible Bonds in full on the Relevant Redemption Date (as defined below):

Date of redemption (the Principal amount of Outstanding “Relevant Redemption the Convertible principal amount Date”) Bonds redeemed after redemption On or before the 1[st] RMB5,000,000 RMB123,370,000 anniversary of the (based on the (based on the First Issue Date Exchange Rate, Exchange Rate, equivalent to equivalent to HK$5,414,185.20) HK$133,589,604.76) On or before the 2[nd] RMB10,000,000 RMB113,370,000 anniversary of the (based on the (based on the First Issue Date Exchange Rate, Exchange Rate, equivalent to equivalent to HK$10,828,370.32) HK$122,761,234.43)

– 22 –

LETTER FROM THE BOARD

On or before the 3[rd] RMB15,000,000 RMB98,370,000 anniversary of the First (based on the (based on the Issue Date Exchange Rate, Exchange Rate, equivalent to equivalent to HK$16,242,555.50) HK$106,518,678.94) On or before the 4[th] RMB20,000,000 RMB78,370,000 anniversary of the First (based on the (based on the Issue Date Exchange Rate, Exchange Rate, equivalent to equivalent to HK$21,656,740.70) HK$84,861,938.28)

The Company shall pay the relevant redemption amounts in cash (equivalent to the entire principal amount of the Convertible Bonds or such outstanding amount thereof, whichever shall be appropriate). Subject to the other conditions contained in the CB Instrument, in the case that the Company fails to redeem the relevant principal amount of the Convertible Bonds in full on the Relevant Redemption Date, if the principal amount of the Convertible Bonds that should be redeemed but has not been redeemed (“ Pending Redemption Amount ”) is lower than 30% of the relevant principal amount of the Convertible Bonds to be redeemed, then the Company may redeem this relevant Pending Redemption Amount within three months after the Relevant Redemption Date. However, in the event that the Company fails to redeem the relevant Pending Redemption Amount in three months after the Relevant Redemption Date, or the Pending Redemption Amount on the Relevant Redemption Date is more than 30% of the relevant principal amount that are subject to redemption on the Relevant Redemption Date, then it shall constitute an event of default and must be dealt with in accordance with the relevant provisions contained in the CB Instrument.

– 23 –

LETTER FROM THE BOARD

• Redemption prior to maturity:

• Without prejudice to any other conditions contained in the CB Instrument and the principal amount of the Convertible Bonds to be redeemed and the Relevant Redemption Dates according to the above paragraph or subject to the payment by the Company to the Bondholders of not less than the total amount available to the Bondholders pursuant to the above paragraph (whichever shall be appropriate), the Company may at its sole and absolute discretion redeem the principal amount of the Convertible Bonds (or such outstanding part thereof, whichever shall be appropriate) at any time during the period commencing on the Business Day immediately after the First Issue Date and ending on the Maturity Date (both dates inclusive) by paying such redemption amount equivalent to the entire principal amount of the Convertible Bonds (or such outstanding part thereof, whichever shall be appropriate) to the Bondholder(s).

Redemption at maturity:

• All Convertible Bonds which have not been redeemed or converted in accordance with the terms and conditions contained in the CB Instrument by the Maturity Date shall be redeemed by the Company on the Maturity Date, and the relevant redemption amount (equivalent to the entire principal amount of the Convertible Bonds or such outstanding part thereof, whichever shall be appropriate) shall be paid in cash. Unless the Company has, in accordance with the paragraph above, redeemed in excess of the amount specified in the above paragraph before the Maturity Date and/or the Bondholder has exercised the Conversion Rights according to certain provisions in the CB I n s t r u m e n t , o t h e r w i s e t h e C o m p a n y s h a l l p a y RMB78,370,000 (based on the Exchange Rate, equivalent to HK$84,861,938.28) to the Bondholder on the Maturity Date to redeem the balance of the principal amount of the Convertible Bonds.

– 24 –

LETTER FROM THE BOARD

Redemption on default:

If any of the events (“ Events of Default ”, and each an “ Event of Default ”) specified below occur, the Company shall forthwith give notice thereof to the Bondholders and each Bondholder may (without prejudice to any other rights and remedies available to the Bondholders), at its option, serve a notice for redemption to the Company in respect of the Convertible Bonds or any part of the principal amount of the Convertible Bonds (whichever is appropriate) held by it, whereupon such Convertible Bonds shall become immediately due and payable at a redemption amount equal to the principal amount of such Convertible Bonds. The relevant Events of Default are:

• (i) the Company fails to pay the Interest and/or redeem the principal amount of the Convertible Bonds when due in accordance with the paragraphs headed “ Interest ”, “ Redemption before maturity ”, “ Redemption prior to maturity ” and “ Redemption at maturity ” above and such failure continues for a period of over ten (10) Business Days;

• (ii) the Company violates any provisions in the CB Instrument and/or does not comply with any of its undertakings, warranties or statements made in accordance with the provisions in the CB Instrument (other than the undertaking of repaying the principal amount of the Convertible Bonds), which default is incapable of remedy (the notice as described below is not required in this situation) or, if capable of remedy, is not remedied within ten (10) Business Days following the service by any Bondholder on the Company of notice requiring such default to be remedied;

• (iii) a resolution is passed or an order of a court of competent jurisdiction is made that the Company be wound up or dissolved, other than for the purposes of a c o n s o l i d a t i o n , a m a l g a m a t i o n , m e r g e r o r reorganisation, which shall have previously been approved in writing by Bondholder(s) or pursuant to and followed such resolutions;

– 25 –

LETTER FROM THE BOARD

• (iv) the issue of final judgment or order by a court of competent jurisdiction against the Company requiring the Company to pay its outstanding debts within a period of time and the Company is unable to comply with such order within the period of time;

• (v) any actions, conditions or things required to be taken, satisfied or completed at any time (including the obtaining of any necessary consent, approval, authorisation, waiver, application, permission, order, recording or registration or giving effect thereto) for the purpose of (a) enabling the Company lawfully to enjoy, exercise its rights and, perform and comply with its obligations under the Convertible Bonds or the CB Instrument, (b) ensuring that those obligations are legally binding and enforceable, and (c) making the Convertible Bonds or the CB Instrument admissible as evidence in the courts of Hong Kong, is not taken, satisfied or completed within the prescribed time; or

• (vi) any event occurring which has a similar effect to any of the events referred to the above sub-paragraphs (i) to (v).

• Ranking of the Conversion Subject to the CB Instrument, the Conversion Shares issued Shares: upon exercise of the Conversion Rights shall rank pari passu in all respects with all other existing Shares outstanding prior to the Conversion Date and all the rights of Conversion Shares shall include rights to participate in all dividends, and all other distributions on or after the record date or the Conversion Date.

– 26 –

LETTER FROM THE BOARD

Transferability:

• The Bondholders may assign or transfer the Convertible Bonds or any part of the principal amount of the Convertible Bonds to any person, no matter such transferee is a connected person of the Company or not. Without prejudice to the terms as set out in the CB Instrument, any assignment and/or transfer of the Convertible Bonds or any part thereof including (1) the listing of the Conversion Shares on the Stock Exchange shall be subject to the Listing Rules and all applicable laws and regulations; and (2) if there is a proposed assignment and/or transfer of Convertible Bonds to a connected person of the Company shall be subject to the approval of the Shareholders at the relevant general meeting (if necessary) and in accordance with applicable requirements of the Listing Rules.

Any transfer of the Convertible Bonds shall be in respect of the whole (which is RMB128,370,000, based on Exchange Rate, equivalent to HK$139,003,790) or any part (which must be in multiples of RMB500,000) of the principal amount of the outstanding Convertible Bonds.

• Status of the Convertible Bonds:

• The obligations of the Company arising under the Convertible Bonds constitute general, unsecured and unsubordinated obligations of the Company and rank pari passu among themselves and other present and future unsecured and unsubordinated obligations of the Company except for obligations accorded preference by mandatory provisions of applicable law.

• Application for listing:

• The Company will apply to the Listing Committee for the listing of, and permission to deal in, the Conversion Shares. No application will be made for the listing of the Convertible Bonds on the Stock Exchange or any other stock exchange.

– 27 –

LETTER FROM THE BOARD

EQUITY FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS

Date of		Net proceeds		Actual use of
announcement	Event	raised	Proposed use of proceeds	proceeds
12 July 2024	Subscription of	Approximately	(i) approximately HK$3.85	Utilised as intended
	convertible bonds	HK$5.5 million	million for the repayment of
	under general		the outstanding liabilities of
	mandate		the Group; and
			(ii) approximately HK$1.65
			million for the overhead
			expenses, administrative
			expenses and operating
			expenses of the Group.
7 May 2024,	Placing of new	HK$13.5 million	(i) settlement of the outstanding	Utilised as intended
28 May 2024,	Shares under		liabilities of the Group in the
11 June 2024 and	general mandate		amount of approximately
2 July 2024			HK$9.3 million (being
			approximately 70% of the
			net proceeds);
			(ii) development of the business
			of the Group in the amount
			of approximately HK$2.7
			million (being approximately
			20% of the net proceeds);
			and
			(iii) general working capital of
			the Group in the amount of
			a p p r o x i m a t e l y H K $1.5
			million (being approximately
			10% of the net proceeds).

Save as disclosed above, the Company has not conducted any other equity fund raising activities in the past 12 months immediately prior to the Latest Practicable Date.

– 28 –

LETTER FROM THE BOARD

EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

For illustration purposes only, set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately after full conversion of the Convertible Bonds at the initial Conversion Price (assuming there is no other change in the total number of issued Shares from the Latest Practicable Date and up to the date of full conversion of the Convertible Bonds) and (iii) immediately after full conversion of the Convertible Bonds at the initial Conversion Price and full conversion of all other outstanding convertible bonds of the Company (assuming there is no other change in the total number of issued Shares from the Latest Practicable Date and up to the date of full conversion of the Convertible Bonds or all other outstanding convertible bonds of the Company, whichever is later):

Shareholders Directors Mr. Wang Bin_(Note 1, 5) Mr. Zhang Yi(Note 2, 5) Ms. Chu Wei Ning(Notes 3, 5) Ms. Lam Sze Man(Notes 4, 5) Mr. Chan Kee Huen, Michael (Note 5)_ Sub-total CQ Zifeng 2024 GM CB Holders GM CB Holders Public Shareholders Total	(i) As at the Latest Practicable Date (ii) Immediately after full conversion of the Convertible Bonds at the initial Conversion Price (assuming there is no other change in the total number of issued Shares from the Latest Practicable Date and up to the date of full conversion of the Convertible Bonds) No. of Shares Approximate% No. of Shares Approximate% – – – – 2,154,275 2.2110% 2,154,275 1.9743% 300,000 0.3079% 300,000 0.2749% 5,000 0.0051% 5,000 0.0046% 250 0.0003% 250 0.0002% 2,459,525 2.5243% 2,459,525 2.2541% – – 11,678,635 10.7032% – – – – – – – – 94,975,148 97.4757% 94,975,148 87.0427% 97,434,673 100.00% 109,113,308 100.00%	(iii) Immediately after full conversion of the Convertible Bonds at the initial Conversion Price and full conversion of all other outstanding convertible bonds of the Company (assuming there is no other change in the total number of issued Shares from the Latest Practicable Date and up to the date of full conversion of the Convertible Bonds or all other outstanding convertible bonds of the Company, whichever is later) No. of Shares Approximate% 10,335,917 8.2721% 2,154,275 1.7241% 300,000 0.2401% 5,000 0.0040% 250 0.0002% 12,795,442 10.2405% 11,678,635 9.3467% 1,500,000 1.2005% 3,999,998 3.2013% 94,975,148 76.0110% 124,949,223 100.00%

– 29 –

LETTER FROM THE BOARD

Notes:

1. Hong Fu (HF) Holdings Group Limited is the bondholder of the convertible bonds in the principal amount of RMB20,000,000 (approximately HK$23,255,813.96), which may be converted into no more than 10,335,917 Shares based on the conversion price of HK$2.25 upon full conversion. The maturity date of such convertible bonds will be on 30 June 2026. Hong Fu (HF) Holdings Group Limited is ultimately owned by Mr. Wang Bin as to 85.05%. Mr. Wang Bin was appointed as an executive Director on 7 July 2023.

2. 800 Shares are beneficially owned by Mr. Zhang Yi, an executive Director, and 2,153,475 Shares are beneficially owned by One Faith Investments Limited, which is beneficially and wholly owned by Mr. Zhang Yi. In addition, Mr. Zhang Yi owns 372,156 share options which entitles him to subscribe for 372,156 Shares.

3. In addition to 300,000 Shares, Ms. Chu Wei Ning owns 372,156 share options which entitles her to subscribe for 372,156 Shares.

4. In addition to 5,000 Shares, Ms. Lam Sze Man owns 186,078 share options which entitles her to subscribe for 186,078 Shares.

5. Mr. Wang Bin, Mr. Zhang Yi, Ms. Chu Wei Ning and Ms. Lam Sze Man are executive Directors, and Mr. Chan Kee Huen, Michael is an independent non-executive Director.

6. Certain percentage figures included in the table above have been subject to rounding adjustments. Accordingly, figures shown as total may not be an arithmetic aggregation of the figures preceding them.

INFORMATION ON CQ ZIFENG

CQ Zifeng is a partnership incorporated in Chongqing, the PRC with limited liability and is principally engaged in investments. CQ Zifeng is indirectly owned and controlled by Chongqing Municipal SASAC (State-owned Assets Supervision Administration Commission of the State Council) as at the Latest Practicable Date.

– 30 –

LETTER FROM THE BOARD

FINANCIAL EFFECTS OF THE SETTLEMENT AGREEMENT AND THE ISSUE OF THE CONVERTIBLE BONDS

Subject to final audit, given the aggregate amount under the Settlement Agreement is approximately RMB131,577,000, compared with the amount due to CQ Zifeng as at 31 March 2024, it is expected that the Group will record a gain of approximately RMB6,445,000.

The actual gain or loss arising from the Settlement Agreement and the issue of the Convertible Bonds will be subject to final audit and may be different from the amount stated.

REASONS FOR AND BENEFITS OF THE SETTLEMENT AGREEMENT AND THE ISSUE OF THE CONVERTIBLE BONDS

The principal activity of the Company is investment holding and the principal activities of its subsidiaries are convergence media business, dry grinding and dry beneficiation business, and other operations – investment, securities trading and tourism and hospitality business.

As disclosed in the financial reports of the Company in recent years, the Company has been actively negotiating with its creditors for loan capitalisation and extension of loan repayment period to improve its financial position. As disclosed in the annual report of the Company for the year ended 31 March 2024, the Company recorded net liabilities of approximately HK$374,730,000. The total liabilities of the Group amounted to approximately HK$443,020,000, of which the current liabilities amounted to approximately HK$408,163,000, representing approximately 92.13% of the total liabilities.

Pursuant to the terms of the Settlement Agreement, the Convertible Bonds will be settled over the period of five years. This arrangement aims to alleviate repayment pressure and effectively addresses the Company’s going concern issue by spreading out the repayment of the Convertible Bonds over a longer term. Furthermore, the Settlement Agreement endeavours to enhance the Company’s financial standing by addressing current liabilities, thereby allowing for greater flexibility in the allocation of financial resources towards business development. Additionally, the Conversion Price of the Convertible Bonds, which has a substantial premium over the current market price of the Shares, significantly mitigates the dilution effect of the Convertible Bonds on the Shareholders.

– 31 –

LETTER FROM THE BOARD

As mentioned above, the issue of the Convertible Bonds is for settlement of the Agreed Amount. The principal amount of the Convertible Bonds of RMB128,370,000 (based on the Exchange Rate, equivalent to HK$139,003,790) and a cash of RMB800,000 for the first repayment (principal) shall be used to set off RMB129,170,000 (based on the Exchange Rate, equivalent to approximately HK$139,870,060) from the Agreed Amount on a dollar-for-dollar basis. There will not be any proceeds from the issue of the Convertible Bonds and the relevant expenses in relation to the issue of the Convertible Bonds are estimated to be approximately HK$400,000 which will be payable by the Company.

Upon the Completion, the obligations and the Agreed Amount shall be settled and discharged fully and finally pursuant to the Settlement Agreement.

In view of the above, the Directors consider that the terms of the Settlement Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

THE SPECIFIC MANDATE

The Conversion Shares will be allotted and issued pursuant to the Specific Mandate which is subject to the Shareholders’ approval at the SGM.

SGM

The SGM will be convened and held at Level 6, Infinitus Plaza, 199 Des Voeux Road Central, Sheung Wan, Hong Kong on Thursday, 10 October 2024 at 3:00 p.m. for the purpose of considering and, if thought fit, approving the Settlement Agreement and the transactions contemplated thereunder, including the issue of the Convertible Bonds, the allotment and issue of the Conversion Shares, and the grant of the Specific Mandate.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, the resolution proposed at the SGM shall be voted by poll. An announcement on the poll vote results will be made by the Company after the SGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

To the best of Directors’ knowledge, information and belief having made all reasonable enquiries, as at the Latest Practicable Date, no Shareholders have any material interest in the Settlement Agreement and the transactions contemplated thereunder and are required to abstain from voting on the resolution to approve the Settlement Agreement and the transactions contemplated thereunder (including the issue of the Convertible Bonds, the allotment and issue of the Conversion Shares, and the grant of the Specific Mandate) at the SGM.

– 32 –

LETTER FROM THE BOARD

A notice convening the SGM is set out on pages SGM-1 to SGM-3 of this circular. A form of proxy for use at the SGM is enclosed with this circular. Whether or not you are able to attend the SGM, you are requested to complete, sign and return the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the enclosed form of proxy will not preclude you from attending and voting in person at such meeting or any adjournment meeting should you so wish.

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

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Monday, 7 October 2024 to Thursday, 10 October 2024, both days inclusive, for the purpose of ascertaining the Shareholders’ entitlement to attend and vote at the SGM. In order to be eligible to attend and vote at the SGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office, Tricor Secretaries Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, no later than 4:30 p.m. on Friday, 4 October 2024.

RECOMMENDATION

The Directors consider that although the Settlement Agreement and the transactions contemplated thereunder are not in the ordinary and usual course of business of the Group, the terms of the Settlement Agreement and the transactions contemplated thereunder are on normal commercial terms, fair and reasonable and the entering into the Settlement Agreement is in the interests of the Company and the Shareholders as a whole. As such, the Directors recommend the Shareholders to vote in favour of the relevant resolution to be proposed at the SGM.

– 33 –

LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

Yours faithfully,

For and on behalf of the Board

China Baoli Technologies Holdings Limited Chu Wei Ning

Executive Director and Chief Executive Officer

– 34 –

NOTICE OF SPECIAL GENERAL MEETING

==> picture [35 x 53] intentionally omitted <==

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)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “ SGM ”) of China Baoli Technologies Holdings Limited (the “ Company ”) will be held on Thursday, 10 October 2024 at 3:00 p.m. at Level 6, Infinitus Plaza, 199 Des Voeux Road Central, Sheung Wan, Hong Kong for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

1. (a) the settlement agreement dated 11 April 2024 (as supplemented by a letter dated 26 August 2024) (the “ Settlement Agreement ”) entered into between the Company, Chongqing Baoli Yota Technologies Limited （重慶寶力優特 科技有限公司） (“ CQ Baoli Yota ”) and Chongqing Zifeng Business Partnership (Limited Partnership) （重慶市梓峰商貿合夥企業（有限合夥）) (“ CQ Zifeng ”) (a copy of the Settlement Agreement is marked “A” and the letter dated 26 August 2024 is marked “B” and initialed by the chairman of the SGM for identification purpose has been tabled at the meeting), pursuant to which the Company, CQ Baoli Yota and CQ Zifeng have agreed to settle the agreed amount of RMB129,170,000 by, inter alia, the issue of convertible bonds in the principal amount of RMB128,370,000 (the “ Convertible Bonds ”) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

2. (b) the grant of the specific mandate to the directors of the Company (the “ Directors ”) to allot and issue 11,678,635 new shares of the Company upon the exercise of the conversion rights attaching to the Convertible Bonds be and is hereby approved, confirmed and ratified. The specific mandate is in addition to, and shall not prejudice nor revoke any general or specific mandate(s) which has/have been granted or may from time to time be granted to the Directors by the shareholders of the Company prior to the passing of this resolution; and

– SGM-1 –

NOTICE OF SPECIAL GENERAL MEETING

• (c) any one or more of the Directors be and is/are hereby authorised to do all such acts and things and execute all such documents which he/she/they consider necessary, appropriate, desirable or expedient for the purpose of, or in connection with the implementation of giving effect to the Settlement Agreement, the transactions contemplated thereunder and the issue of the Convertible Bonds to CQ Zifeng.”

By order of the Board China Baoli Technologies Holdings Limited Chu Wei Ning Executive Director and Chief Executive Officer

Hong Kong, 20 September 2024

Notes:

1. Any shareholder entitled to attend and vote at the SGM shall be entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A proxy needs not be a shareholder of the Company. A shareholder who is the holder of two or more shares of the Company (“ Shares ”) may appoint more than one proxy to attend and vote on the same occasion.

2. Where there are joint registered holders of any Share(s), any one of such joint holders may attend and vote at the SGM, either in person or by proxy in respect of such Share(s) as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the SGM or any adjournment thereof (as the case may be), the more senior shall alone be entitled to vote, whether in person or by proxy. For this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

3. In order to be valid, a form of proxy in the prescribed form together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power or authority must be deposited at the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, not less than 48 hours before the time fixed for holding the SGM or any adjournment thereof (as the case may be).

4. Completion and return of the form of proxy will not preclude members of the Company from attending and voting at the SGM or any adjournment thereof (as the case may be) should they so wish and in such event, the form of proxy shall be deemed to be revoked.

– SGM-2 –

NOTICE OF SPECIAL GENERAL MEETING

1. The register of members of the Company will be closed from Monday, 7 October 2024 to Thursday, 10 October 2024, both days inclusive, during which period no transfer of shares will be registered. In order to determine the identity of the shareholders who are entitled to attend and vote at the SGM, all duly completed transfer forms accompanied by the relevant share certificates must be lodged with the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, no later than 4:30 p.m. on Friday, 4 October 2024.

2. If a tropical cyclone warning signal No. 8 or above is hoisted or “extreme conditions” caused by super typhoons or a black rainstorm warning signal is in force any time from 8:00 a.m. to 1:00 p.m. on the date of the SGM, the SGM will be postponed and members of the Company will be informed of the date, time and venue of the postponed SGM by a supplementary announcement posted on the website of the Stock Exchange. The SGM will be held as scheduled even when tropical cyclone warning signal no. 3 or below is hoisted, or an amber or red rainstorm warning signal is in force. Members of the Company should make their own decisions as to whether they would attend the SGM under such bad weather conditions and if they choose to do so, they are advised to exercise care and caution.

As at the date of this notice, the executive Directors are Mr. Wang Bin (Chairman), Mr. Zhang Yi (Vice 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.

– SGM-3 –