Kingwell : MAJOR TRANSACTION ACQUISITION OF THE PROPERTY

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.

KINGWELL GROUP LIMITED

京 維 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1195)

MAJOR TRANSACTION

ACQUISITION OF THE PROPERTY

Financial adviser to the Company

THE ACQUISITION

The Board is pleased to announce that, on 14 August 2020 (after trading hours), the Purchaser, an indirectly wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Vendor, pursuant to which the Purchaser conditionally agreed to purchase, and the Vendor conditionally agreed to sell, the Property at the Consideration of RMB40,000,000 (equivalent to approximately HK$44,400,000).

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Acquisition exceed 25% but less than 100%, the Acquisition constitutes a major transaction for the Company and is therefore subject to the announcement, reporting and shareholders' approval requirements under Chapter 14 of the Listing Rules.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholder or any of their respective associates have any material interest in the Acquisition. As such, no Shareholder would be required to abstain from voting on the resolution to approve, among others, the Sale and Purchase Agreement and the Acquisition at the EGM.

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GENERAL

A circular containing, among others, further information on the Acquisition, a valuation report of the Property and other information as required under the Listing Rules will be despatched to the Shareholders. As it is expected that additional time will be required to prepare the relevant information to be included in the circular, the Company will apply to the Stock Exchange for an extension of time for despatch of the circular by no later than 20 October 2020.

INTRODUCTION

The Board is pleased to announce that, on 14 August 2020 (after trading hours), the Purchaser, an indirectly wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Vendor, pursuant to which the Purchaser conditionally agreed to purchase, and the Vendor conditionally agreed to sell, the Property at the Consideration of RMB40,000,000 (equivalent to approximately HK$44,400,000).

Major terms of the Sale and Purchase Agreement are as follows:

THE SALE AND PURCHASE AGREEMENT

Date	:	14 August 2020
Vendor	:	Xuzhou City Zhongwei Real Estate Co., Ltd.#（徐州市中維地產有限公
		司）
Purchaser	:	Xuzhou Ronghui Commercial Management Company Limited#（徐州融
		滙商業管理有限公司）
Property to be acquired	:	3 blocks of 3-storey commercial buildings, which comprises of Block
		10, Block 11 and Block 12 in the Xuzhou Yueqiao Flower Garden
		Project#（徐州月橋花院項目）developed by the Vendor. The Property
		is free from encumbrances including but not limited to lien, pledge,
		mortgage and any other form of restriction of rights.
		The Property is allowed to be used for commercial purpose and the
		Vendor has obtained from the relevant government authorities in
		the PRC the (i) construction land use right; (ii) permits for planning
		construction project; and (iii) pre-sale permits in relation to the
		development and sales of the Property. The Property is expected to be
		completed no later than 31 August 2021.

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Consideration and	:	The Consideration is in the sum of RMB40,000,000 (equivalent to
Payment Terms		approximately HK$44,400,000), which shall be paid within 7 days upon
		the fulfilment of the following payment requirements or 31 October
		2020, whichever is later:
		1) the approval of the Stock Exchange in respect of the Acquisition
		having been obtained;
		2) the passing of the necessary resolution(s) at the general meeting
		of the Purchaser and the EGM of the Company respectively to
		approve the Acquisition; and
		3) all the representations in relation to the Property in the Sale and
		Purchase Agreement remaining true.
		If the above payment requirements are not fulfilled on or before 30
		June 2021 and no party is in default, the Acquisition shall automatically
		terminate and none of the parties thereto shall have any liability in
		respect of such termination.
		The Consideration was determined after arm's length negotiations
		between the Purchaser and the Vendor, by reference to, among others,
		market values of comparable properties and a preliminary market
		valuation of the Property as appraised by an independent valuer of
		RMB42,400,000 (equivalent to approximately HK$47,064,000) as at 31
		July 2020. The Consideration shall be financed by the internal resources
		of the Group.
Completion	:	Completion shall take place within 7 days upon the occurrence of the
		following events:
		The Vendor shall (i) obtain the construction completion certificate#（建
		設工程竣工驗收備案証明）and related documents and the building
		drawing examination report#（房屋測繪報告）of the Property and (ii)
		complete the installation of water pipelines and facilities, electricity and
		heating systems of the Property.
		The Vendor undertakes that the Completion shall take place no later
		than 31 August 2021.

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INFORMATION ON THE PROPERTY

The Property is located at the intersection of Fuchun Road and Hanyuan Avenue, Yunlong District, Xuzhou City, Jiangsu Province, the PRC#（中國江蘇省徐州市雲龍區富春路與漢源大道交滙處）,

which is a new city center in Xuzhou City. The district is the Xuzhou City local government base, new

business and financial hub of Xuzhou City. The Property is located nearby the Xuzhou University of Technology#（徐州工程學院）and Xincheng Qu Da Longhu Jingqu#（新城區大龍湖景區）.

The Property comprises of 3 blocks of 3-storey commercial buildings covering site area of a total of approximately 3,267.11 square metres, which encompasses Block 10 (with a site area of approximately 1,292.67 square metres), Block 11 (with a site area of approximately 1,143.94 square metres) and

Block 12 (with a site area of approximately 830.50 square metres) in Xuzhou Yueqiao Flower Garden Project#（徐州月橋花院項目）developed by the Vendor.

As at the date of this announcement, construction work for the main structure of the Property has been completed. Further work such as the installation of water and heating system and electrical wiring is under process. Based on the information available so far and the representations of the Vendor, it is currently expected that the construction of the Property will be completed no later than 31 August 2021.

INFORMATION OF THE COMPANY, THE PURCHASER AND THE VENDOR

The Company is 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. The Group is principally engaged in the production and sale of gold and providing property development, property leasing and property management services, which involves the development of villas, apartments and commercial buildings, property leasing of self-owned properties, the sale of carpark spaces, and provision of property management services and construction services.

The Purchaser is a limited company established in the PRC and an indirectly wholly-owned subsidiary of the Company. The Purchaser is principally engaged in property management and agency services.

The Vendor is a property development company established in the PRC with limited liability. To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, each of the Vendor and its ultimate beneficial owner(s) are third parties independent of the Company and its connected person(s) (as defined in the Listing Rules).

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REASONS FOR AND BENEFITS OF THE ACQUISITION

As disclosed in the annual report of the Company for the year ended 30 June 2019, the Company will continue to implement its diversified development strategy and proactive search for potential investment opportunities. Following the acquisition of its property management business and carpark spaces in Xuzhou City of the PRC in November 2018 and March 2019 respectively, the Group would like to further expand its property related business segment in the PRC with the intention to generate a sustainable income to the Group. In this connection, the Company has actively identified quality properties in the PRC for acquisition to increase its property portfolio and to expand the Group's participation in the PRC property market.

The Group is familiar with the economic development and business environment in Xuzhou City. Having taken into account, among others, the Consideration, the quality and location of the Property and its development potential, the Group considers that the entering into the Sale and Purchase Agreement serves as a good opportunity to consolidate its current property portfolio in the PRC and the Acquisition is in line with the business strategies of the Group.

On the basis of the above, the Directors are of the view that the terms of the Sale and Purchase Agreement are on normal commercial terms, fair and reasonable and are in the interests of Shareholders as a whole.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Acquisition exceed 25% but is less than 100%, the Acquisition constitutes a major transaction for the Company and is therefore subject to the announcement, reporting and shareholders' approval requirements under Chapter 14 of the Listing Rules.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholder or any of their respective associates have any material interest in the Acquisition. As such, no Shareholder would be required to abstain from voting on the resolution to approve, among others, the Sale and Purchase Agreement and the Acquisition at the EGM.

A circular containing, among others, further information on the Acquisition, a valuation report of the Property and other information as required under the Listing Rules will be despatched to the Shareholders. As it is expected that additional time will be required to prepare the relevant information to be included in the circular, the Company will apply to the Stock Exchange for an extension of time for despatch of the circular by no later than 20 October 2020.

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DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions have the following meanings ascribed to them respectively:

"Acquisition"

"associate(s)"

"Board"

"Company"

the acquisition of the Property by the Purchaser pursuant to the terms and conditions of the Sale and Purchase Agreement

has the meaning ascribed thereto under the Listing Rules

the board of Directors

Kingwell Group Limited（京維集團有限公司）, a limited company incorporated in Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 1195)

"Completion"

"connected person"

"Consideration"

"Director(s)"

"EGM"

completion of the Acquisition

has the meaning ascribed thereto in the Listing Rules

the sum of RMB40,000,000 (equivalent to approximately HK$44,400,000), being the purchase price of the Property

director(s) of the Company

the extraordinary general meeting of the Company to be convened for the purpose of considering, and if thought fit, approving, among others, the Sale and Purchase Agreement and the Acquisition

"Group"

"Hong Kong"

"HK$"

"Listing Rules"

"PRC"

the Company and its subsidiaries

the Hong Kong Special Administrative Region of the PRC

Hong Kong dollar, the lawful currency of Hong Kong

the Rules Governing the Listing of Securities on the Stock Exchange

the People's Republic of China, excluding, for the purpose of this announcement only, Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

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"Property"

"Purchaser"

Block 10, Block 11 and Block 12 in Xuzhou Yueqiao Flower Garden Project#（徐州月橋花院項目） (located at the intersection of Fuchun

road and Hanyuan Avenue, Yunlong District, Xuzhou City, Jiangsu Province, the PRC#（中國江蘇省徐州市雲龍區富春路與漢源大道交 匯處）)

Xuzhou Ronghui Commercial Management Company Limited#（徐州融 滙商業管理有限公司）, a company established in the PRC with limited

liability and an indirectly wholly-owned subsidiary of the Company

"RMB"	Renminbi, the lawful currency of PRC
"Sale and Purchase	the sale and purchase agreement dated 14 August 2020 entered into
Agreement"	between the Purchaser and the Vendor in relation to the Acquisition
"Shareholders"	holder(s) of the shares of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"subsidiary(ies)	has the meaning ascribed thereto in the Listing Rules
"Vendor"	Xuzhou City Zhongwei Real Estate Co., Ltd.#（徐州市中維地產有限公
	司）, a company established in the PRC with limited liability
"%"	per cent

The exchange rate used for the purpose of this announcement is at RMB1.00 = HK$1.11. Such conversion should not be construed as a representation that any amount has been, could have been or may be exchanged at this or any other date.

By Order of the Board

Kingwell Group Limited

Mu Dongsheng

Chairman

Hong Kong, 14 August 2020

As at the date of this announcement, the Board comprises Mr. Mu Dongsheng and Mr. Du Yun as executive Directors, Mr. Cheung Chuen, Mr. Ling Aiwen and Mr. Lu Lin as independent non-executive Directors.

• Translation of Chinese or English terms for reference only. In the event of any discrepancies between the Chinese names and their respective English translations, the Chinese version shall prevail.

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