Yadea Group Holdings Ltd. — Capital/Financing Update 2017

Nov 23, 2017

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.

Yadea Group Holdings Ltd. 雅迪集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code : 1585)

DISCLOSEABLE TRANSACTION IN RELATION TO ACQUISITION OF PROPERTIES

The Board is pleased to announce that on 23 November 2017, the Purchaser, a direct wholly-owned subsidiary of the Company, entered into the Agreements with the Vendor in relation to acquisition of entire issued share capital and the Shareholder Loan of the Target at a total consideration of RMB370,975,976.84. The Target is a wholly-owned subsidiary of the Vendor and is the sole legal and beneficial owner of the Property.

As certain applicable percentage ratios in respect of the Acquisition calculated under Chapter 14 of the Listing Rules are more than 5% but all of the relevant percentage ratios are less than 25%, the Acquisition constitutes a discloseable transaction of the Company under the Listing Rules and is subject to notification and announcement requirements under Chapter 14 of the Listing Rules.

The Board is pleased to announce that on 23 November 2017, the Purchaser, a direct whollyowned subsidiary of the Company, entered into the Agreements with the Vendor in relation to acquisition of entire issued share capital and the Shareholder Loan of the Target at a total consideration of RMB370,975,976.84.

THE AGREEMENTS

Major terms of Agreements are set out below:

Date: 23 November 2017

The Purchaser: Yadea Technology Group Co., Ltd. (雅迪科技集團有限公司), a wholly-owned subsidiary of the Company

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The Vendor:

PingAn Trust Co., Ltd. (平安信托有限責任公司)

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendor and the ultimate beneficial owner(s) of the Vendor are Independent Third Parties.

Assets to be acquired:

• Pursuant to the Agreements, the Purchaser has agreed to acquire, and the Vendor has agreed to sell the entire issued share capital of the Target and the Shareholder Loan owing by the Target to the Vendor on Completion.

The Target is a wholly-owned subsidiary of the Vendor and is the sole legal and beneficial owner of the Property.

Property:

• Building No. 7, Hongqiao Sincere Centre, No. 5, Alley 187, Xinghong Road, Shanghai, China (中國上海市興虹路187弄5號「虹 橋協信中心」第7幢樓)

• Consideration: The total consideration for the Acquisition is RMB370,975,976.84, w h i c h c o m p r i s e s o f ( i ) R M B 2 1 9 , 0 3 5 , 9 7 6 . 8 4 f o r t h e acquisition of entire issued share capital of the Target and (ii) RMB151,940,000.00 for the Shareholder Loan owing by the Target to the Vendor on Completion. The total consideration was agreed between the Purchaser and the Vendor after arm’s length negotiation. The Directors consider that the total consideration is fair and reasonable after taking into account (i) the prevailing market prices of properties of similar nature available nearby; and (ii) the current Shanghai property market sentiment.

• The total consideration will be funded by the Company’s internal resources.

• Payment terms: The Purchaser has paid the Vendor an initial deposit of RMB20,000,000.00 upon signing of a memorandum of understanding on 28 August 2017 and a further deposit of RMB165,487,988.42 upon signing of the Agreements.

The remaining balance of the total consideration in the amount of RMB185,487,988.42 shall be paid the Purchaser within ten (10) business days from the date of the Agreements (the “ Remaining Balance ”).

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Completion:

The Vendor and the Purchaser shall file the application for the registration of the transfer of the Property within three (3) Business Days after receiving the Remaining Balance from the Purchaser. The Property shall be delivered by the Vendor to the Purchaser within five (5) business days after completion of registration of the transfer of the Property from the Vendor to the Purchaser with the relevant PRC governmental authority.

INFORMATION OF THE VENDOR, THE TARGET AND THE PROPERTY

The Vendor is a company established in the PRC with limited liability and is principally engaged in trust management.

The Target is a company established in the PRC with limited liability and is principally engaged in property management in Shanghai, China. The principal asset of the Target is the Property located at Building No.7, Hongqiao Sincere Centre, No.5, Alley 187, Xinghong Road, Shanghai, China. The property was completed in August 2016 and has five floors with a total gross floor area of 8,526.27 square metres. The property will be used as the headquarters, research, development and design centre and sales and marketing centre of the Company. The property is currently is not leased out.

Financial Information on the Target

Based on the audited financial information of the Target for each of the financial years ended 31 December 2015 and 2016, the audited net loss before taxation of the Target were approximately RMB8,721 and RMB3,088,315, respectively, and the audited net loss after taxation of the Target were approximately RMB8,721 and RMB3,008,315, respectively.

As at 31 December 2016, the audited net asset value of Target was approximately RMB238,495,129 and the audited net liabilities of the Target was approximately RMB158,579,009.

Upon Completion, the Target will become a direct wholly-owned subsidiary of the Purchaser and an indirect wholly-owned subsidiary of the Company and its financial shall be consolidated will that of the Group.

INFORMATION OF THE GROUP AND THE PURCHASER

The Group is the leading electric two-wheeled vehicle brand in China focusing on designing, researching, developing, manufacturing and selling electric two-wheeled vehicles under “Yadea” brand. The Purchaser is a company established in the PRC with limited liability and a direct wholly-owned subsidiary of the Company. The Purchaser is the holding company of all of the Group’s operating subsidiaries in the PRC and is principally engaged in the production of electric scooters.

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REASONS FOR THE ACQUISITION

As disclosed in the annual report of the Company for the year ended 31 December 2016, to promote “Yadea” brand, expand the Group’s business and recruit talented professionals internationally, the Directors consider to relocate the Group’s headquarters from Wuxi to a prime location in Shanghai. By establishing headquarters in Shanghai, one of the international metropolis in the PRC, the Directors hope to attract talented and qualified individuals for the Company’s design team and quality management team and facilitate the management’s ambition to further capture the growth in demand for high-end electric two-wheeled vehicles not only in the PRC but also across the world and enhance the Group’s competitive edge in the electric two-wheeled vehicles industry. The Directors consider that it is in the interest of the Group to acquire the Property in order to secure the prime location site in Shanghai and save future rental expenses.

The Board considers that the Acquisition and the terms of the Agreements including the total consideration are on normal commercial terms, fair and reasonable and in the interests of the Group and the Company’s Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As certain applicable percentage ratios in respect of the Acquisition calculated under Chapter 14 of the Listing Rules are more than 5% but all of the relevant percentage ratios are less than 25%, the Acquisition constitutes a discloseable transaction of the Company under the Listing Rules and is subject to notification and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

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

• “Acquisition” the acquisition of the entire issued share capital of the Target and the Shareholder Loan owing by the Target to the Vendor on Completion by the Purchaser pursuant to the terms of the Agreements

• “Agreements” (1) the share transfer agreement dated 23 November 2017 entered into between the Purchaser and the Vendor in relation to the acquisition of the entire issued share capital of the Target; (2) the shareholder loan transfer agreement dated 23 November 2017 entered into among the Purchaser, the Vendor and the Target in relation to the transfer of Shareholder Loan owing by the Target to the Vendor on Completion; and (3) the sale and purchase framework agreement 23 November 2017 entered into between the Purchaser and the Vendor in relation to the Acquisition

• “Board” the board of Directors

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“Business Day”	a day (other than Saturday) on which banks in Hong Kong are
	generally open for business
“Company”	Yadea Group Holdings Ltd. (雅迪集團控股有限公司), a limited
	liability company incorporated in the Cayman Islands on 17
	July 2014, with its Shares listed on the main board of the Stock
	Exchange
“Completion”	completion of the Acquisition
“Director(s)”	the director(s) of the Company
“Group”	collectively, the Company and its subsidiaries from time to time
“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
“Independent Third	individual or company which is independent of and not connected
Party(ies)”	with (within the meaning of the Listing Rules) any member of the
	Group, the Directors, chief executive and substantial shareholders
	of the Company and its subsidiaries and their respective associates
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China which, for the purpose of
	this announcement excludes Hong Kong, Macau Special
	Administrative Region of the PRC and Taiwan
“Property”	Building No. 7, Hongqiao Sincere Centre, No. 5, Alley 187,
	Xinghong Road, Shanghai, China (中國上海市興虹路187弄5號「虹
	橋協信中心」第7幢樓)
“Purchaser”	Yadea Technology Group Co., Ltd. (雅迪科技集團有限公司), a
	company established in the PRC with limited liability, a direct
	wholly-owned subsidiary of the Company as at the date of this
	announcement
“RMB”	Renminbi, the lawful currency for the time being of the PRC
“Shareholder”	shareholder of the Company
“Shareholder Loan”	the loan or obligation owed by the Target to the Vendor which is
	unsecured, interest-free and has no fixed repayment terms

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“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Target” Shanghai Muhong Investment Management Co., Ltd., a company established in the PRC with limited liability and is wholly owned by the Vendor as at the date of this announcement

“Vendor” PingAn Trust Co., Ltd. (平安信托有限責任公司), a company established in the PRC with limited liability

“%”

per cent.

By order of the Board Yadea Group Holdings Ltd. Dong Jinggui Chairman

Hong Kong, 23 November 2017

As at the date of this announcement, Mr. Dong Jinggui, Ms. Qian Jinghong, Mr. Liu Yeming, Mr. Shi Rui and Mr. Shen Yu are the executive Directors; and Mr. Li Zongwei, Mr. Wu Biguang and Mr. Yao Naisheng are the independent non-executive Directors.

This announcement is published on the website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk and the Company’s websites at www.yadea.com.cn.

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