China Assurance Finance : Announcements and Notices – Voluntary Announcement (Strategic Cooperation)

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中 國 融 保 金 融 集 團 有 限 公 司

China Assurance Finance Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8090) VOLUNTARY ANNOUNCEMENT STRATEGIC COOPERATION AGREEMENT

This is a voluntary announcement made by China Assurance Finance Group Limited (the "Company", together with its subsidiaries, the "Group").

The board (the "Board") of directors (the "Directors") of the Company is pleased to announce that on 24 May 2017, the Company and Guangxi Sumaotong Business Services Company Limited*(廣西速貿通商務服務有限公司) ("Guangxi Sumaotong") (collectively, the "Parties") entered into a strategic cooperation agreement (the "Strategic Cooperation Agreement") pursuant to which all-dimensional cooperation will be rolled out by the Parties for cross-border electronic trading of Guangxi specialty agricultural products on the online trading platform of the Company taking advantage of the integrated services for foreign trade import and export business implemented by Guangxi Sumaotong.

Summary of the Strategic Cooperation Agreement

According to the Strategic Cooperation Agreement, in the principle of complementing each other to attain mutual benefits and common development, all-dimensional cooperation will be rolled out in the area of bulk commodities cross-border trading in response to the national strategy of "The Belt and Road Initiative" and the requirement for reforming the supply side so as to better serve the real economy.

The Parties recognised that bulk commodities are bulk-trading goods which are used for the production and consumption in industrial and agricultural sectors. Bulk commodities have significant commodity attributes, with its pricing, trading, warehousing, logistics etc. having a crucial impact on the national economic development. By connecting traditional bulk commodities exchanges to the internet, bulk commodities exchange platform version 2.0, i.e. bulk commodities electronic trading platform will be formed to enable bulk commodities trading to take place anytime anywhere.

The Parties agreed to align as strategic partners externally. The Company is responsible for providing necessary resources and technical support such as online trading platform. Guangxi Sumaotong is responsible for integrating customs clearance, tallying, financing, insurance, exchange settlement, tax refund of foreign trade import and export business into one platform, i.e. providing "one-stop" foreign trade services to market participants.

All-dimensional cooperation will be rolled out by the Parties on the cross-border electronic trading of bulk commodities. Guangxi Sumaotong became a member of Nanning (China-ASEAN) Commodity Exchange Company Limited* (南寧（中國 ─ 東盟）商品交易所有限公司), a subsidiary of the Company. Guangxi Sumaotong will consolidate market resources, organise clients to use the exchange electronic transaction platforms for carrying out business transactions and settlement, provide relevant services and take advantage of the transaction information, related services, business guidance offered by the Company or the exchange and be entitled to its rights and bear corresponding responsibilities in accordance with its membership tier. In addition, the Parties will develop trade financing business on the exchange electronic transaction platforms with the pilot site as Nanning city. Loan platforms for small and medium enterprises ("SME") from Nanning City SME Business Centre* (南寧市中小企業服務中心) (a department of Nanning city municipal government) will be actively introduced and favourable policies for SME financing will be brought in.

Guangxi Sumaotong is responsible for the provision of foreign trade comprehensive services for the Company's trading clients, specific services of which include:

1. Guangxi Sumaotong opening up information interface to facilitate the obtaining of information for the cross-border trading platform of the Company on customs, inspection and quarantine, taxation, foreign exchange and other information by utilising existing resources;

2. Guangxi Sumaotong entering into import and export agency service agreement with the Company's trading clients and will be responsible for managing their customs clearance, logistics, related import and export procedures; as well as handling their filing, tax refund and foreign exchange settlement with state taxation department and foreign exchange administration department;

3. Guangxi Sumaotong coordinating with government departments such as commerce, customs, inspection and quarantine, foreign exchange and taxation to resolve trading clients' problems in relation to the comprehensive services for foreign trade;

4. Guangxi Sumaotong setting up a credit guarantee funds pool for international trade of industrial commodities, which is earmarked for procedural default payments in relation to receivables and payables for foreign trade comprehensive services. The compensation mechanism of the credit guarantee funds pool will dispel the doubts on credit between buyers and sellers, solve the fundamental problem on trust during a transaction, and therefore facilitate the conclusion of a transaction; and

5. Replying on Nanning City "Two Platforms One Association" SME Loan Platform* (南寧市

「兩台一會」中小企業貸款平台), Guangxi Sumaotong will provide the Company's trading clients with a series of SME financing products and services.

Information on Guangxi Sumaotong

Guangxi Sumaotong was established in September 2016 with a registered capital of RMB20 million. It possesses self-operated import and export qualification and became the first batch of pilot enterprises for foreign trade comprehensive services identified by the Department of Commerce of Guangxi Zhuang Autonomous Region in December 2016. Guangxi Sumaotong foreign trade comprehensive services platform (www.sumaotong.cn) has been on trial run. It is the only authorised professional institution to develop and operate Guangxi-ASEAN Region (Nanning) Foreign Trade Integration Complex Clearance Acceleration Project* (廣西 - 東盟區

域（南寧）外貿一體化綜合體通關提速工程項目）.

To carry out the implementation of the spirit of "Nanning City Acceleration of Foreign Trade and Economic Development 3-Year Action Plan (2016-2018)*" (南寧市加快外經貿發展三年行 動計劃(2016-2018年)), Guangxi Sumaotong focuses on developing Guangxi-ASEAN Region (Nanning) Foreign Trade Integration Complex Clearance Acceleration Project* (廣西 - 東盟區 域（南寧）外貿一體化綜合體通關提速工程項目), striving to create Nanning as a foreign trade comprehensive management and services platform catering to The Association of Southeast Asian Nations ("ASEAN"). Among the first batch of the four foreign trade comprehensive services pilot enterprises identified by the Department of Commerce of Guangxi Zhuang Autonomous Region, Guangxi Sumaotong is the first approved by the General Administration of Customs of the People's Republic of China (the "PRC") for accessing to China Electronic Port Data Centre. Guangxi Sumaotong is the only company in Nanning Customs region which has realised integrated electronic customs clearance on the foreign trade comprehensive services platform and has achieved "release after only one declaration and inspection" at "one single counter" through the

"one stop service at one counter for one declaration, acceptance and feedback all together". Upon completion of the project, Guangxi Sumaotong will be able to integrate services such as customs clearance, tallying, financing, insurance, exchange settlement, tax refund of foreign trade import and export business into one platform, so as to provide "one-stop" foreign trade comprehensive services to small and medium foreign trade enterprises to lower their trade costs effectively and enhance the competitiveness of their exports. For the period from October to December 2016, the export value of enterprises served by Guangxi Sumaotong amounted to US$80 million which filled in the gap of not having local foreign trade comprehensive services enterprises in Nanning city.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, Guangxi Sumaotong and his close associates are third parties independent of the Company and its connected persons (as defined under the Rules Governing the Listing of Securities on the Growth Enterprise Market (the "GEM") of the Stock Exchange (the "GEM Listing Rules")).

REASONS FOR AND BENEFITS OF ENTERING INTO THE STRATEGIC COOPERATION AGREEMENT

The Group is primarily engaged in the business of providing online trading platform services and financial guarantee services in the PRC and in ASEAN countries.

This cooperation will promote the Guangxi specialty agricultural products to ASEAN market and even to places worldwide. There is at least a RMB trillion-scale bulk commodities market within the region of China and the 10 ASEAN countries, such as rubber, fruit, grain, starch, marine products etc. from Vietnam and other ASEAN countries as well as cotton, soybeans from the northeast part of the PRC, white sugar, mechanical and electrical products from Guangxi. Traders from different countries will procure and trade commodities through the Company's electronic trading platforms; and will be provided with "one stop" import and export services including customs clearance, inspection, logistics, insurance, exchange settlement and tax refund from Guangxi Sumaotong. Guangxi local agricultural products manufacturers, corporations and traders from different countries will enjoy convenient, efficient, cost effective commodities trading as well as logistics and related services. Moreover, by carrying out physical cross-border business, the Parties will provide flexible trade financing to various types of participating trade organisations. Financing will be provided to domestic and international trade based on credit demands of different trade organisations and trade forms to solve the problem of funds shortage in entity enterprises and circulation enterprises.

The Board is of the view that, by implementing this cooperation, (i) the Group will build a large platform based on cross-border trade in the China - ASEAN region, incorporating the three areas of cross-border trade, finance and internet technology big data to open up the China - ASEAN regional cross-border trade; (ii) the Group will continue to step into the ASEAN region in 2017 by setting up bulk commodities and futures exchange in countries including Malaysia, Myanmar and Cambodia, with the expectation to realise a complete platform network for cross-border trade; and (iii) the Parties will form a win-win and sustainable strategic partnership integrating the advantages and resources of the Parties in order to help themselves to create greater business value. Therefore, entering into of the Strategic Cooperation Agreement is in the interests of the Company and its shareholders as a whole.

By order of the Board

China Assurance Finance Group Limited Pang Man Kin Nixon

Chairman and Executive Director

Hong Kong, 24 May 2017

As at the date of this announcement, the executive Directors are Mr. Pang Man Kin Nixon, Mr. Chang Hoi Nam, Mr. Chan Kim Leung, Mr. Law Fei Shing and Dato' Sri Hah Tiing Siu; and the independent non-executive Directors are Mr. Chan Kai Wing, Mr. Lam Raymond Shiu Cheung and Mr. Chow Shiu Ki.

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 at www.hkgem.com for a minimum period of 7 days from the date of its publication and on the Company's website at www.cafgroup.hk.

* For identification purposes only