Youzan Technology Limited — Capital/Financing Update 2014

Dec 10, 2014

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.

==> picture [221 x 33] intentionally omitted <==

China Innovationpay Group Limited 中國創新支付集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

DISCLOSEABLE TRANSACTION CAPITAL CONTRIBUTION TO A CONSUMER FINANCE COMPANY BE APPROVED TO ESTABLISH

On 19 November 2014, Beijing TTSB signed a shareholder contribution agreement with four other companies including 海爾集團公司, intending to jointly establish 海爾消費 金融 in accordance with “The Company Law of the People’s Republic of China” and the requirements of the “Pilot Administrative Measures for Consumer Finance Companies” (《消費金融公司試點管理辦法》) of Chinese Banking Regulatory Commission (“CBRC”). The establishment of a consumer finance company requires pre-approval in the PRC, and subject to the permission granted by CBRC.

The Board wishes to inform the shareholders that 海爾消費金融, which is to be established by way of capital contribution by Beijing TTSB with four other companies including 海爾 集團公司, has obtained the approval today by CBRC to be established.

海爾消費金融 primarily engages in the lending of personal consumer loans. The capital contribution made by Beijing TTSB was RMB50 million (equivalent to approximately HK$63.1 million), at a capital contribution ratio of 10%.

As the relevant percentage ratio (as defined under the GEM Listing Rules) exceeds 5% but less than 25%, the capital contribution agreement and the transactions contemplated thereunder constitute a discloseable transaction for the Company under Chapter 19 of the GEM Listing Rules.

CAPITAL CONTRIBUTION

On 19 November 2014, Beijing Tiantongsaibo Information Technology Co., Ltd. (“Beijing TTSB”), an indirect wholly-owned subsidiary of the Company signed a shareholder contribution agreement with four other companies including 海爾集團公司, intending to

– 1 –

jointly establish 海爾消費金融 in accordance with “The Company Law of the People’s Republic of China” and the requirements of the“Pilot Administrative Measures for Consumer Finance Companies” (《消費金融公司試點管理辦法》) of Chinese Banking Regulatory Commission (“CBRC”).The establishment of a consumer finance company requires preapproval in the PRC, and subject to the permission granted by CBRC.

The board of directors (the “Board”) of China Innovationpay Group Limited (the “Company”) wishes to inform the shareholders that 海爾消費金融, which is to be established by way of capital contribution by Beijing TTSB with four other companies including 海爾集團公司, has obtained the approval today by CBRC to be established.

海爾消費金融 was established through joint capital contribution by Beijing TTSB and four other companies including 海爾集團公司, primarily engaging in the lending of personal consumer loans. The capital contribution made by Beijing TTSB was RMB50 million (equivalent to approximately HK$63.1 million), at a capital contribution ratio of 10%. The amount of contribution is determined by the parties of the contribution agreement after arm’s length negotiations. The Company intends to settle the capital contribution with the internal resources of the Group.

THE PRINCIPAL TERMS OF CAPITAL CONTRIBUTION AGREEMENT

Date: 19 November 2014

The capital contribution parties:

• A: 海爾集團公司, as a major capital contributor.

• B: 海爾集團財務有限責任公司, as a general contributor.

• C: 北京紅星美凱龍國際家居建材廣場有限公司, as a general contributor.

• D: 浙江逸榮投資有限公司, as a general contributor.

• E: Beijing Tiantongsaibo Information Technology Co., Ltd., as a general contributor.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the other capital contribution parties and their ultimate beneficial owners are Independent Third Parties.

Contribution period:

Within 30 working days from the date of approval by CBRC for the corporate establishment of 海爾消費金融 an one-off full amount of the contribution by each party will be deposited into a verification account opened by the Company.

– 2 –

The main businesses of 海爾消費金融:

The establishment of a consumer finance company requires pre-approval in the PRC, and subject to the permission granted by CBRC. Upon approval by the Administration for Industry and Commerce and the CBRC, the Company may engage in part or all of the following RMB businesses: (1) lending of personal consumer loans; (2) acceptance of deposits from domestic subsidiaries of a shareholder and from a domestic shareholder; (3) borrowings from a domestic financial institutions; (4) issuance of financial bonds upon approval; (5) domestic inter-bank lending; (6) consultancy and agency business in relation to consumer finance; (7) agency sales of insurance products in relation to consumer loans; (8) fixed-income securities investment business; and (9) other businesses as approved by CBRC.

REASONS FOR AND BENEFITS OF THE CAPITAL CONTRIBUTION

The Company is an investment holding company and its subsidiaries are principally engaged in four segments, namely (i) general trading: trading of electronic products, network hardware equipment, financial equipment and communication products; (ii) prepaid card business: the operations of prepaid card business, including the issuance of various prepaid cards, part of which have multiple functions, in the PRC and recently in Hong Kong, as well as the sales of prepaid phone cards; (iii) the development and operations of travel VIP card products and the provision of online air-tickets and hotel reservation services for individual and corporate customers; and (iv) others.

As a capital contributor to 海爾消費金融, Beijing TTSB’s wholly-owned subsidiary, Beijing Gaohuitong Commercial Management Company Limited (北京高匯通商業管理有限公司), which holds a “license of payment operations”, will provide all-faceted payment services for the operations of 海爾消費金融, including the development and launch of integrated intelligent POS, the operations and management of prepaid card system and the development of relevant payment softwares.

The Directors of the Company believe that the capital contribution into “海爾消費金融” could effectively expand the current financial payment business and improve the finance payment industrial chain. The prepaid cards business of the Company would also accelerate the accumulation of individual users and expand the acceptance of the prepaid cards, through the cooperation with “海爾消費金融”. This will actively stimulate the development of the prepaid cards business of the Company.

The Directors believe that the terms of this transaction are fair and reasonable and in the interests of the Company and the shareholders as a whole pursuant to Rule 19.58(9) of the GEM Listing Rules.

– 3 –

GEM LISTING RULES IMPLICATION

As the relevant percentage ratio (as defined under the GEM Listing Rules) exceeds 5% but less than 25%, the capital contribution agreement and the transactions contemplated thereunder constitute a discloseable transaction for the Company under Chapter 19 of the GEM Listing Rules.

DEFINITIONS

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

“Beijing TTSB”	北京天同賽伯信息科技有限公司(Beijing Tiantongsaibo
	Information Technology Co., Ltd.), an indirect wholly-owned
	subsidiary of the Company, and an advanced-technology
	company with limited liability legally established and
	validly existing in accordance with the laws of the People’s
	Republic of China
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on the GEM
“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 PRC
“Independent Third Party(ies)”	a party(ies) who is/are a third party(ies) independent of the
	Company and its connected persons (as defined under the
	GEM Listing Rules)
“PRC”	the People’s Republic of China, for the purpose of this
	announcement, excludes Hong Kong, Macau Special
	Administrative Region of the PRC and Taiwan
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“海爾消費金融”	海爾消費金融有限公司, a company of limited liability
	intending to be incorporated in Qingdao City, PRC
“海爾集團公司”	a collective enterprise legally established and validly existing
	in accordance with the laws of the People’s Republic of
	China, mainly engaging in the design, production and sales
	of household appliances

– 4 –

• “海爾集團財務有限責任公司”

• a corporate finance company legally established and validly existing in accordance with the laws of the People’s Republic of China, and a non-banking financial institution registered in the PRC with a “Financial License”

• “北京紅星美凱龍國際家居建材 廣場有限公司”

a company with limited liability legally established and validly existing in accordance with the laws of the People’s Republic of China. It mainly engages in the chain operations and sales of household stuff

• “浙江逸榮投資有限公司”

an investment company with limited liability legally established and validly existing in accordance with the laws of the People’s Republic of China

“%”

per cent

By Order of the Board China Innovationpay Group Limited Guan Guisen Chairman

Hong Kong, 10 December 2014

As at the date of this announcement, the Board comprises three executive Directors, namely Mr. Guan Guisen, Dr. Lei Chunxiong and Mr. Cao Chunmeng; and three independent nonexecutive Directors, namely Dr. Fong Chi Wah, Mr. Wang Zhongmin and Mr. Gu Jiawang.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement 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 announcement misleading.

This announcement will remain on the “Latest Company Announcements” page of the GEM website for at least 7 days from the date of its posting and on the Company’s website at www.innovationpay.com.hk.

– 5 –