Dexin China : CONNECTED TRANSACTION DISPOSAL OF PARKING SPACES

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DEXIN CHINA HOLDINGS COMPANY LIMITED

德 信 中 国 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2019)

CONNECTED TRANSACTION

DISPOSAL OF PARKING SPACES

INTRODUCTION

The Board announces that on October 24, 2019, Deguan Investment (an indirect wholly-owned subsidiary of the Company) and Junde Commercial entered into the Parking Spaces Transfer Agreement, pursuant to which Deguan Investment has agreed to sell, and Junde Commercial has agreed to purchase, the Parking Spaces at a consideration of RMB11,934,000.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Junde Commercial is a wholly-owned subsidiary of ShengQuan Property Service, which is owned as to approximately 80.09% by Shengquan Holding, a wholly-owned subsidiary of Dexin Holding. Dexin Holding is owned as to 91.61% by Mr. Hu Yiping (an executive Director and a controlling Shareholder) and 8.39% by Mr. Hu Shihao (a non-executive Director and a controlling Shareholder), respectively. Accordingly, Junde Commercial, an associate of Mr. Hu Yiping (as defined under the Listing Rules), constitutes a connected person of the Company, and the Parking Spaces Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

Since the highest applicable percentage ratio calculated with reference to Rule 14.07 of the Listing Rules in respect of the Parking Spaces Disposal is higher than 0.1% but less than 5%, the Parking Spaces Disposal is subject to the reporting, announcement and annual review requirements and is exempt from the circular and independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

INTRODUCTION

The Board announces that on October 24, 2019, Deguan Investment (an indirect wholly-owned subsidiary of the Company) and Junde Commercial entered into the Parking Spaces Transfer Agreement, pursuant to which Deguan Investment has agreed to sell, and Junde Commercial has agreed to purchase, the Parking Spaces at a consideration of RMB11,934,000.

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PARKING SPACES TRANSFER AGREEMENT

The principal terms of the Parking Spaces Transfer Agreement are set out below:

Date

October 24, 2019

Parties

1. Deguan Investment (as vendor); and
2. Junde Commercial (as purchaser).

Subject Matter

Pursuant to the Parking Spaces Transfer Agreement, Deguan Investment has agreed to sell, and Junde Commercial has agreed to purchase, the Parking Spaces, being 153 underground parking spaces located at Morning Mansion as specified in the Parking Spaces Transfer Agreement, at a consideration of RMB11,934,000. The Parking Spaces shall be sold to Junde Commercial free from encumbrances.

Consideration and Payment Terms

The consideration for the Parking Spaces under the Parking Spaces Transfer Agreement is RMB11,934,000, and the payment schedule by Junde Commercial to Deguan Investment is as follows:

1. RMB6,000,000, being the initial deposit, is payable by Junde Commercial on or before December 31, 2019; and
2. RMB5,934,000, being the remainder of the consideration, is payable by Junde Commercial on or before June 30, 2020.

The consideration for the Parking Spaces under the Parking Spaces Transfer Agreement was determined based on normal commercial terms and after arm' s length negotiations between the parties to the Parking Spaces Transfer Agreement, with reference to, among other things, the market value of similar parking spaces in similar locations.

Delivery

Within two days upon the payment of initial deposit of the consideration by Junde Commercial, Deguan Investment shall deliver the Parking Spaces and issue authorised sales certificates regarding the Parking Spaces to Junde Commercial in accordance with the terms of the Parking Spaces Transfer Agreement.

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INFORMATION ON THE GROUP, DEGUAN INVESTMENT AND JUNDE COMMERCIAL

The Group

The Group is principally engaged in the property development and construction services, property investment and hotel operations in the PRC.

Deguan Investment

Deguan Investment is a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company. Deguan Investment is principally engaged in property development.

Junde Commercial

Junde Commercial is a company established under the laws of the PRC with limited liability and is principally engaged in property management business. As at the date of this announcement, Junde Commercial is a wholly-owned subsidiary of ShengQuan Property Service. ShengQuan Property Service is owned as to approximately 80.09% by Shengquan Holding which is wholly-owned by Dexin Holding, a company owned by Mr. Hu Yiping (an executive Director and a controlling Shareholder) as to 91.61% and Mr. Hu Shihao (a non-executive Director and a controlling Shareholder) as to 8.39%, respectively.

REASONS FOR AND BENEFITS OF THE PARKING SPACES DISPOSAL

The Parking Spaces are located at Morning Mansion, a residential project located in Hangzhou City, Zhejiang Province, the PRC, developed by Deguan Investment and completed in November 2016. The Parking Spaces have not generated any rental income for the Group since their completion in 2016.

As at October 24, 2019, the unaudited net asset value of the Parking Spaces was approximately RMB4,090,000. Upon completion of the Parking Spaces Disposal, the Group expects to recognise an unaudited gain of approximately RMB7,844,000, being the difference between the consideration and the aforesaid net asset value of the Parking Spaces at completion of the Parking Spaces Disposal. The actual gain or loss as a result of the Parking Spaces Disposal to be recorded by the Group is subject to audit and will be determined as at the date of the completion of the Parking Spaces Disposal.

The Directors consider that the Parking Spaces Disposal can revitalize the Group' s project assets and the Parking Spaces Disposal can recognise a gain, and enhance the cashflow turnover rate and overall shareholders' return of the Group.

The net proceeds from the Parking Spaces Disposal of approximately RMB11,934,000 will be used as general working capital of the Group.

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DIRECTORS' CONFIRMATION

In light of the interests of Mr. Hu Yiping and Mr. Hu Shihao (the son of Mr. Hu Yiping) in Junde Commercial as further explained in the section headed "Implications under the Listing Rules" below, each of Mr. Hu Yiping and Mr. Hu Shihao has abstained from voting on the resolution of the Board in respect of the Parking Spaces Transfer Agreement pursuant to the articles of association of the Company and requirements under the Listing Rules. Save as disclosed above, none of the other Directors has a material interest in the Parking Spaces Transfer Agreement and the transactions contemplated thereunder and hence no other Director has abstained from voting on the relevant Board resolution.

The Directors (including the independent non-executive Directors) are of the view that the Parking Spaces Disposal is in the usual and ordinary course of business of the Group, and the terms of the Parking Spaces Transfer Agreement are on normal commercial terms no less favourable to the Company than terms available to Independent Third Parties and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Junde Commercial is a wholly-owned subsidiary of ShengQuan Property Service, which is owned as to approximately 80.09% by Shengquan Holding, a wholly-owned subsidiary of Dexin Holding. Dexin Holding is owned as to 91.61% by Mr. Hu Yiping (an executive Director and a controlling Shareholder) and 8.39% by Mr. Hu Shihao (a non- executive Director and a controlling Shareholder), respectively. Accordingly, Junde Commercial, an associate of Mr. Hu Yiping (as defined under the Listing Rules), constitutes a connected person of the Company, and the Parking Spaces Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

Since the highest applicable percentage ratio calculated with reference to Rule 14.07 of the Listing Rules in respect of the Parking Spaces Disposal is higher than 0.1% but less than 5%, the Parking Spaces Disposal is subject to the reporting, announcement and annual review requirements and is exempt from the circular and independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:

"Board"

"Company"

"Deguan Investment"

the board of Directors

Dexin China Holdings Company Limited (德信中国控股有限公司), a company incorporated under the laws of the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 2019)

Hangzhou Deguan Investment Co., Ltd.* (杭州德冠投資有限公

司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

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"Dexin Holding"

"Director(s)" "Group"

"Independent Third Party(ies)"

"Junde Commercial"

"Listing Rules"

"Morning Mansion"

"Parking Spaces"

"Parking Spaces Disposal"

"Parking Spaces Transfer Agreement"

"PRC"

"RMB"

"Shareholder(s)"

"Shengquan Holding"

"ShengQuan Property Service"

Dexin Holding Group Limited* (德信控股集團有限公司), a limited liability company established in the PRC and is owned as to 91.61% by Mr. Hu Yiping and 8.39% by Mr. Hu Shihao

the director(s) of the Company

the Company and its subsidiaries

To the best of Directors' knowledge, information and belief, having made all reasonable enquiries, individual(s) or company(ies) and its/their respective ultimate beneficial owner(s) which is/are third party(ies) independent of the Company and its connected persons (as defined in the Listing Rules)

Hangzhou Junde Commercial Operation Management Co., Ltd.* (杭 州駿德商業運營管理有限公司), a company established under the

laws of the PRC with limited liability

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

a residential project located in Hangzhou City, Zhejiang Province, the PRC, developed by Deguan Investment and completed in November 2016

the 153 underground parking spaces located at Morning Mansion as specified in the Parking Spaces Transfer Agreement

the disposal of the Parking Spaces by Deguan Investment to Junde Commercial pursuant to the Parking Spaces Transfer Agreement

the parking spaces transfer agreement dated October 24, 2019 and entered into between Deguan Investment and Junde Commercial in respect of the Parking Spaces Disposal

the People' s Republic of China

Renminbi, the lawful currency of the PRC

shareholder(s) of the Company

Shengquan Holding Co., Ltd.* (盛全控股有限公司), a company established under the laws of the PRC with limited liability which is wholly-owned by Dexin Holding

ShengQuan Property Service Co., Ltd.* (盛全物業服務股份有限公

司), a company established under the laws of the PRC with limited liability

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"Stock Exchange"The Stock Exchange of Hong Kong Limited

"%"

per cent

By order of the Board

Dexin China Holdings Company Limited

Hu Yiping

Chairman

Hong Kong, October 24, 2019

As of the date of this announcement, the Board of Directors of the Company comprises Mr. Hu Yiping, Mr. Fei Zhongmin and Ms. Feng Xia as executive Directors, Mr. Hu Shihao as a non- executive Director, and Dr. Wong Wing Kuen Albert, Mr. Ding Jiangang and Mr. Chen Hengliu as independent non-executive Directors.

• For identification purposes only

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