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.

MANWAH MAN WAH HOLDINGS LIMITED

敏華控股有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 01999) ESTABLISHMENT OF A STRATEGIC ALLIANCE COMPLETION ANNOUNCEMENT

Reference is made to the announcement of the Company dated 20 November 2016 in relation to the establishment of a strategic alliance with Home Group.

In accordance with the Shareholders' Agreement, 75% of the equity interest of the relevant entities of Home Group's operating companies in Poland, the Baltic States and Ukraine were transferred to a subsidiary of Home Group Ltd with effect from 31 December 2016. Subsequent to this and in accordance with the Shareholders' Agreement, MW Group has subscribed for a 50% shareholding interest in Home Group Ltd. for an initial payment of Euro 14 million (about HK$114.9 million), with remaining instalments being payable in accordance with the Shareholders' Agreement over 2018, 2019 and 2020, up to an aggregate of Euro 50,692,890 (about HK$416.2 million).

Reference is made to the announcement of the Company dated 20 November 2016 ("Announcement") in relation to the establishment of a strategic alliance with Home Group. Capitalised terms used herein and not otherwise defined have the same meanings as defined in the Announcement.

CAPITAL CONTRIBUTION UNDER THE SHAREHOLDERS' AGREEMENT

In accordance with the Shareholders' Agreement, 75% of the equity interest of the relevant entities of Home Group's operating companies in Poland, the Baltic States and Ukraine were transferred to a subsidiary of Home Group Ltd with effect from 31 December 2016. Subsequent to this and in accordance with the Shareholders' Agreement, MW Group has subscribed for a 50% shareholding interest in Home Group Ltd. for an initial payment of Euro 14 million (about HK$114.9 million) ("Initial Payment"), with remaining instalments being payable in accordance with the Shareholders' Agreement over 2018, 2019 and 2020, up to an aggregate of Euro 50,692,890 (about HK$416.2 million) ("Maximum Consideration"). The Initial Payment was reduced by US$2 million (about HK$15.6 million), being the amount of a loan made in accordance with the Shareholders' Agreement and which, as per such agreement, is now part of MW Group's Euro 14 million (about HK$114.9 million) capital contribution.

SUBSEQUENT INSTALMENTS AND ADJUSTMENTS

The aggregate consideration for the 50% stake in Home Group Ltd will be determined by the audited net profit after tax of Home Group (with agreed adjustments to achieve a pro forma basis) for the financial year ended 31 December 2017, 2018 and 2019, in each case divided by 3 to take into account the agreement that the aggregate consideration should reflect the financial performance in each of the three financial years.

Consideration is payable in three tranches in 2018, 2019 and 2020 respectively, with the value of each tranche based on an agreed multiple of the audited net profit after tax of Home Group for the preceding financial year (namely,the financial years ended 31 December 2017, 31 December 2018 and 31 December 2019 respectively). The aggregate of the Initial Payment and subsequent tranches is subject to an amount capped at the Maximum Consideration.

BASIS OF VALUATION AND MAXIMUM CONSIDERATION

The agreed multiples for the above-mentioned three tranches were decided on the basis of Home Group's growth potential for the three years ended 31 December 2019. Each multiple is below the Company's own multiple as calculated by reference to the closing price of the Company's shares on 18 November 2016, being the last trading day prior to the date of the Shareholders' Agreement). In any event, the Maximum Consideration provides a commercially agreed maximum amount so that the Company has limited its investment risk accordingly.

FINANCIAL INFORMATION OF HOME GROUP

According to financial information provided by HG International, the net book value of Home Group, on a combined basis, was approximately Euro 18 million (about HK$147.8 million) as at 30 September 2016, being the latest management accounts available at this time.

The combined net profits before taxation attributable to the assets of Home Group for the financial years ended 31 December 2014 and 2015 were Euro 4 million (about HK$32.8 million) and Euro

0.5 million (about HK$4.1 million)(1).The combined net profits after taxation attributable to the assets of Home Group for the financial years ended 31 December 2014 and 2015 were Euro 3.9 million (about HK$32 million) and Euro 0.3 million (about HK$2.5 million) respectively(1).

(1) The figures disclosed herein represent the combination of historical financials statements, some of which are not audited, which were prepared under different sets of accounting standards. Currency fluctuations in Russia and Ukraine against Euro in 2014 and 2015 (including a devaluation in excess of 50% in the two year-period for the Ukrainian currency against Euro) created a significant impact on the operating results reported herein as a number of operating entities reported in local currency while they carried large obligations in hard currencies on their balance sheets. The adoption of the Euro as the functional currency for the Ukrainian business will avoid these large unrealized foreign exchange losses in the future.

For illustration purposes only, Euro has been translated at Euro 1 to HK$8.21 and US$1 to HK$7.8.

By Order of the Board

Man Wah Holdings Limited Wong Man Li

Chairman

Hong Kong, 25 January 2017

As at the date of this announcement, the executive Directors are Mr. Wong Man Li, Ms. Hui Wai Hing, Mr. Wang Guisheng, Mr. Alan Marnie, Mr. Dai Quanfa and Ms. Wong Ying Ying; and the independent non-executive Directors are Mr. Chau Shing Yim, David, Mr. Ong Chor Wei and Mr. Kan Chung Nin, Tony and Mr. Ding Yuan.

Man Wah Holdings Limited published this content on 25 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 January 2017 14:37:00 UTC.

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