TA Yang : MEMORANDUM OF UNDERSTANDING IN RELATION TO A POSSIBLE ACQUISITION

E163046A_Ta Yang 1..5

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.

TA YANG GROUP HOLDINGS LIMITED

大 洋 集 團 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1991)

MEMORANDUM OF UNDERSTANDING IN RELATION TO

A POSSIBLE ACQUISITION

The Board announces that on 11 July 2016 (after trading hours), the Company entered into the MOU with Ms. Hu. Pursuant to the MOU, the Company and Ms. Hu have expressed their intention for cooperation between the Company and Target Companies, including but not limited to, acquisition of the Target Interests by the Company.

The Target Interests represent 51% equity interest in Target Company A and 51% equity interest in Target Company B. Target Company A is principally engaged in the operation and management of a hospital in Hainan Province, PRC, Target Company B is principally engaged in provision of online medical services in the PRC.

The Company and Ms. Hu agreed that subject to conditions precedent to the Formal Agreement being fulfilled and the result of the due diligence by the Company on the Target Companies being satisfactory, the Company will acquire the Target Interests in accordance with the Formal Agreement to be entered into, in respect of which, the Company is granted with Exclusivity Period of two months (or such later date to be agreed by the Company and Ms. Hu in writing) commencing from the date of the MOU.

The Board wishes to emphasise that the Possible Acquisition is subject to the Company having entered into the Formal Agreement, therefore the Possible Acquisition may or may not proceed. If the Possible Acquisition materialises, it will constitute a notifiable transaction for the Company under Chapter 14 of the Listing Rules.

This announcement is made by the Company pursuant to Rule 13.09(2) of the Listing Rules and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The Board announces that on 11 July 2016 (after trading hours), the Company entered into the MOU with Ms. Hu. Major terms of the MOU are as follows:

THE MOU

Date: 11 July 2016 (after trading hours)

Parties: (1) The Company; and

(2) Ms. Hu Yanjun

Target Company A is owned as to 20% equity interest by Ms. Hu and 80% equity interest by Chengmai Yiling Health Advisory Services Limited (澄邁一齡健康諮詢服務有限公司),

which in turn is owned as to 50% equity interest by Mr. Tian Jianqiu and 50% equity interest by Ms. Hu. Effectively, Ms. Hu has 60% equity interest in Target Company A.

Target Company B is owned as to 40% equity interest by Ms. Hu, 30% equity interest by Mr. Huang He and 30% equity interest by Ms. Hu Yanming.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, Ms. Hu and other ultimate beneficial owners of Target Company A and Target Company B are Independent Third Parties.

Major terms of the MOU

Pursuant to the MOU, given the extensive operating experience of Target Companies in provision of a wide range of medical services, the Company and Ms. Hu have expressed their intention for cooperation between the Company and Target Companies, including but not limited to, acquisition of the Target Interests by the Company. No consideration has been determined as at the date of the MOU.

Exclusivity Period

The Company and Ms. Hu agreed that subject to conditions precedent to the Formal Agreement being fulfilled and the result of the due diligence by the Company on the Target Companies being satisfactory, the Company will acquire the Target Interests in accordance with the Formal Agreement to be entered into, in respect of which, the Company is granted with Exclusivity Period of two months (or such later date to be agreed by the Company and Ms. Hu in writing) commencing from the date of the MOU.

During the Exclusivity Period, Ms. Hu and other shareholders of Target Companies shall not directly or indirectly negotiate or engage in any negotiation or agree with any other party relating to the possible sale of any equity interest in the Target Companies.

Termination

The MOU shall be terminated if (i) the Formal Agreement has been entered into between the Company and Ms. Hu and/or other shareholders of the Target Companies; (ii) the Exclusivity Period has expired; or (iii) agreed by the Company and Ms. Hu in writing.

Save for the exclusivity, termination, confidentiality, costs and governing law and legal effect, terms of the MOU are non-legally binding. The MOU shall be governed by, and interpreted in accordance with, the laws of Hong Kong.

INFORMATION ON THE TARGET COMPANIES

Pursuant to Ms. Hu, Target Company A is principally engaged in the operation and management of a wholly-owned hospital in Chengmai County, Hainan Province, PRC. The hospital specialises in medical services such as healthcare management and medical cosmetology. It possesses a strong team with medical expertises and first class technology.

Target Company B is principally engaged in provision of online medical services, specialising in providing medical and cosmetic and beauty related services through "Yiling

Medical Cloud Platform (一齡雲平台)''. Target Company B provides full range of online

customised medical and cosmetic service solutions, which includes real-time consultation, monitor, check-ups and provide advices to its clients.

REASONS FOR AND BENEFITS OF THE POSSIBLE ACQUISITION

As at the date of this announcement, the Group is principally engaged in designing and manufacturing of silicone rubber input devices, mainly used in consumer electronic devices, keypads for computers and notebooks, mobile phone handsets and automotive peripheral products.

Pursuant to the composite document of the Company dated 6 April 2016, the controlling Shareholder intends to conduct a detailed review of the operations and business activities of the Group and formulate business strategies for the Group's long-term development and will explore other business opportunities for the Group, including the feasibility of diversifying the income stream of the Group into different business areas such as, without limitation to, medical and healthcare industry.

On 20 June 2016, the Company announced that it has entered into an agreement to acquire four hotel buildings in Sanya city, Hainan province of the PRC, which is intended to be developed into high-end residential properties, timeshare concept hotel units and healthcare and medical related business.

The Directors consider that the Possible Acquisition offers the Group an opportunity to extend its services. The medical service offerings shall improve the utilising rate of the hotel properties in Yalong Bay, while the healthcare management and medical service provision business of the Target Companies shall create synergies with the proposed healthcare services that the Group intends to develop at the same hotel properties. Last but not least, the operational and customer data retained by the Target Companies shall provide vital guidance to the Group's future strategies, and assist it with ways of tailoring its services to customers' specific needs. The Possible Acquisition shall diversify the revenue stream of the Group and offer growth potential.

The Board believes that the Possible Acquisition can broaden the Group's business spectrum and will contribute positively to the Group.

GENERAL

The Board wishes to emphasise that the Possible Acquisition is subject to the Company having entered into the Formal Agreement, therefore the Possible Acquisition may or may not proceed. If the Possible Acquisition materialises, it will constitute a notifiable transaction for the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

''Board'' board of Directors

''Company'' Ta Yang Group Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the issued Shares of which are listed on the main board of The Stock Exchange of Hong Kong Limited

''Director(s)'' the director(s) of the Company

''Exclusivity Period'' the two-month period from the date of the MOU

''Formal Agreement'' the agreement which may or may not be entered into

between the Company and Ms. Hu in relation to the acquisition of Target Interests

''Group'' the Company and its subsidiaries

''Independent Third Party'' third party independent of and not connected with the

Company and its connected persons

''Listing Rules'' the Rules Governing the Listing of Securities on The Stock

Exchange of Hong Kong Limited

''MOU'' memorandum of understanding entered into between the Company and Ms. Hu on 11 July 2016 (after trading hours)

''Ms. Hu'' Ms. Hu Yanjun, the legal representative of each of the Target Companies, who has effective interest in 60% shares of Target Company A and 40% shares of Target Company B respectively

''Possible Acquisition'' the possible acquisition of the Target Interests by the

Company as contemplated under the MOU

''PRC'' The People's Republic of China

''Share(s)'' share(s) of HK$0.10 each in the share capital of the Company

''Shareholder(s)'' holder(s) of the shares of the Company

''Target Companies'' Target Company A and Target Company B