Youzan Technology Limited — Capital/Financing Update 2018

Nov 19, 2018

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

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(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

GRANT OF AWARDS UNDER THE SHARE AWARD SCHEME AND ISSUE OF NEW SHARES UNDER GENERAL MANDATE

Reference is made to the announcement of the Company dated 31 May 2018 in respect of the adoption of the Scheme and the announcement of the Company dated 7 September 2018 in respect of the grant of share awards under the Scheme.

The Board announces that on 19 November 2018, the Company granted the Awards involving 314,376,000 New Shares, representing approximately 2.34% of the total issued Shares as at the date of this announcement, to the Grantees at nil consideration. Such New Shares will be allotted and issued to the Trustee, subject to the listing approval by the Stock Exchange in respect of such New Shares, which shall hold such Shares on trust for 251 Employees across 9 different key business units of the Group, all of whom are not connected persons of the Company, in accordance with the Scheme Rules.

The Grantees were selected by the Board after taking into account, among other matters, recommendations from their supervisors, years of services and their seniority, details of which are as follows:

– Recommendations from supervisors : positive recommendations obtained indicating quality of the potential participants of the Scheme, potentials of becoming management and possession of experience in their respective professional fields;

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– Years of services : typically one year or above; and

• Seniority : team leader level or above.

In determining the selection of the Grantees and their respective number of New Shares that each Grantee is entitled to, the Board considers various aforementioned factors as a whole, instead of a standalone factor.

Vesting conditions

The Awards are subject to the acceptance of the Grantees and a minimum of two years of continuous services to the Company or any of its subsidiaries.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, all of the Grantees are Independent Third Parties.

ISSUE OF NEW SHARES UNDER GENERAL MANDATE PURSUANT TO THE SHARE AWARD SCHEME

The Board announces that it has approved the allotment and issue of 314,376,000 New Shares to the Trustee at HK$0.52 per Share, being the closing price of the Shares as at the date immediately preceding the date of this announcement, under the General Mandate in order to satisfy the Awards granted to the Grantees pursuant to the Scheme Rules as incentives for their contributions to the Group. The New Shares will be allotted and issued to the Trustee, subject to the listing Approval by the Stock Exchange in respect of the New Shares.

As approved by the Shareholders at the annual general meeting held on 4 May 2018, the Company can allot and issue up to a total of 1,395,791,039 Shares under the General Mandate. On 7 September 2018, 551,522,400 Shares were issued under the General Mandate for the purpose of the grant of share awards under the Scheme. The New Shares will also be allotted and issued by utilising part of the General Mandate. After completion of the issue and allotment of the New Shares, the remaining balance of the General Mandate will be 529,892,639 Shares.

Upon the allotment and issue of the New Shares, the Trustee will hold the New Shares on trust for the Grantees, which shall then be transferred to the Grantees at no cost upon satisfaction of the abovementioned vesting conditions. Accordingly, no funds will be raised from the issue of the New Shares.

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The New Shares to be allotted and issued by the Company to the Trustee represent (i) approximately 2.34% of the total issued share capital of the Company as at the date of this announcement; and (ii) approximately 2.29% of the total issued share capital of the Company as enlarged by such allotment and issue. The New Shares, when issued and allotted, shall rank pari passu among themselves and with the fully paid Shares in issue. Pursuant to the Scheme Rules, the Trustee shall not exercise any voting rights and powers in respect of any Shares held under the Trust.

Computershare Hong Kong Investor Services Limited, an associate company of the Trustee, is the share registrar of the Company in Hong Kong. The Company does not have any prior business or other relationship with the Trustee save as aforesaid.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, save for the abovementioned relationship between the Trustee and the Company, the Trustee (or its nominee) and its parent company are Independent Third Parties.

The Company will apply to the Stock Exchange for the listing of, and permission to deal in, the New Shares. Save for the approval from the Stock Exchange, the allotment and issue of the New Shares is not subject to any other approvals.

EQUITY FUNDRAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has conducted the following equity fund raising activity for the twelve months immediately preceding the date of this announcement:

Date of announcement	Event	Net proceeds	Use of proceeds
16 April 2018 and	SM Placing	Approximately	All the net proceeds from the SM
16 July 2018		HK$187.0 million	Placing was used towards the
			subscription of new shares
			in Qima Holdings Ltd.,
			a non-wholly owned
			subsidiary of the Company

Save as disclosed above, there were no other equity fundraising activities by the Company through the issue of equity securities in the twelve months immediately preceding this announcement.

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DEFINITIONS

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

“Award(s)” the share awards involving the 314,376,000 Shares granted by the Board to the Grantees pursuant to the Scheme Rules; “Board” the board of Directors; “Company” China Youzan Limited, a company incorporated in Bermuda with limited liability, the issued Shares of which are listed on GEM; “connected person(s)” has the meaning as defined in the GEM Listing Rules; “Director(s)” the director(s) of the Company; “Employee(s)” any employee(s) (whether full time or part time) of any member(s) of the Group; “GEM” GEM operated by the Stock Exchange; “GEM Listing Rules” the Rules Governing the Listing of Securities on GEM; “General Mandate” the general mandate granted by the Shareholders at the annual general meeting of the Company held on 4 May 2018, under which up to a total of 1,395,791,039 Shares (being up to 20% of the total issued share capital of the Company as at the date of the passing of the relevant resolution, which was 4 May 2018) can be allotted and issued by the Directors; “Grantee(s)” the grantee(s) selected by the Board on 19 November 2018, to whom the Awards are granted on the same date by the Board pursuant to the Scheme Rules; “Group” the Company and its subsidiaries;

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“Independent Third	person(s) or company(s) who/which is not connected with the directors,
Party(ies)”	chief executive or substantial shareholders (as defined under the GEM
	Listing Rules) of the Company and its subsidiaries, or any of their
	respective associate;
“New Shares”	the 314,376,000 new Shares that will be allotted and issued to the
	Trustee under the General Mandate for satisfying the Awards;
“Scheme”	the share award scheme approved by the Board on 31 May 2018, as
	amended from time to time in accordance with the provisions thereof;
“Scheme Rules”	the rules relating to the Scheme;
“Shareholder(s)”	holder(s) of the Share(s);
“Share(s)”	share(s) of HK$0.01 each in the share capital of the Company;
“SM Placing”	the placing under specific mandate of the Company completed on 16
	April 2018;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“subsidiary(ies)”	a company which is for the time being and from time to time a
	subsidiary (within the meaning of the Companies Ordinance (Cap. 622
	of the Laws of Hong Kong)) of the Company, whether incorporated in
	Hong Kong or elsewhere;
“Trust”	the trust constituted by the Trust Deed;
“Trust Deed”	a trust deed entered into between the Company and the Trustee on 20
	June 2018 (as restated, supplemented and amended from time to time);
	and
“Trustee”	Computershare Hong Kong Trustees Limited, being the trustee
	appointed by the Company for the administration of the Scheme, which
	will hold the New Shares on trust for the Grantees.
	By Order of the Board
	China Youzan Limited
	Guan Guisen
	Chairman
Hong Kong, 19 November 2018

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As at the date of this announcement, the Board comprises seven executive Directors, Mr. Guan Guisen, Mr. Cao Chunmeng, Mr. Yan Xiaotian, Mr. Zhu Ning, Mr. Cui Yusong, Mr. Yu Tao and Ms. Ying Hangyan; and four independent non-executive Directors, Dr. Fong Chi Wah, Mr. Gu Jiawang, Mr. Xu Yanqing and Mr. Deng Tao.

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.chinayouzan.com.

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