China All Access : MAJOR TRANSACTION IN RELATION TO THE DEEMED DISPOSAL OF INTEREST IN SETD

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, 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.

中 國 全 通 (控 股) 有 限 公 司

CHINA ALL ACCESS (HOLDINGS) LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 633)

MAJOR TRANSACTION

IN RELATION TO

THE DEEMED DISPOSAL OF INTEREST IN SETD

SUBSCRIPTION AGREEMENT

On 2 January 2020, after trading hours, the Subscriber and SETD, a wholly-owned subsidiary of the Company, entered into the Subscription Agreement, pursuant to which the Subscriber has conditionally agreed to subscribe for, and SETD has conditionally agreed to allot and issue, the Subscription Shares (representing approximately 30% of the issued share capital of SETD as enlarged by the issue of the Subscription Shares) at the Subscription Price of HK$210,000,000, upon and subject to the terms and conditions of the Subscription Agreement.

LISTING RULES IMPLICATIONS

As a result of the allotment and issue of the Subscription Shares to the Subscriber by SETD, which will take place upon Completion, the Group's equity interest in SETD Group will be diluted from 100% to approximately 70% immediately after Completion. Such allotment and issue of the Subscription Shares to the Subscriber constitutes a deemed disposal of the Company under the Listing Rules.

As the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Subscription exceeds 25% but is below 75%, the Subscription will constitute a major transaction for the Company under the Listing Rules and will be subject to subject to reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

− 1 −

GENERAL

A circular containing, among other things, (i) further details of the Subscription Agreement and the transactions contemplated thereunder; (ii) other information required to be disclosed under the Listing Rules; and (iii) a notice of the EGM, is expected to be despatched to the Shareholders on or before 31 January 2020, which is more than 15 business days after the publication of this announcement so as to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

Since the Subscription is subject to the fulfilment of the conditions set out in the Subscription Agreement, and may or may not proceed to Completion, Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

THE SUBSCRIPTION AGREEMENT

Date

2 January 2020

Parties

1. SETD, an indirect wholly-owned subsidiary of the Company as at the date of this announcement; and
2. The Subscriber.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Subscriber and its ultimate beneficial owner(s) are Independent Third Parties. The Subscriber is principally engaged in investment holding. It is also the cooperative partner to the strategic cooperation agreement as referred to in the announcement of the Company dated 16 October 2019, pursuant to which the Subscriber had agreed to provide funding of US$500 million to support development of the Group's projects in, among other aspects, new energy solutions, LCD display solutions, plastic injection molding solutions and investment projects which mainly focus in the application of 5G technology in the fields of medicine and education. To implement such strategic cooperation plan, the Subscriber has conditionally agreed to (i) subscribe for 30% of the enlarged registered capital of Shenzhen Lead by way of capital contribution of RMB300 million as disclosed in the announcement of the Company dated 26 November 2019; and (ii) subscribe for the Subscription Shares.

− 2 −

Subject matter

Pursuant to the Subscription Agreement, the Subscriber has conditionally agreed to subscribe for, and SETD has conditionally agreed to allot and issue, the Subscription Shares, representing approximately 30% of the issued share capital of SETD as enlarged by the issue of the Subscription Shares.

Consideration

The Consideration for the Subscription Shares shall be HK$210,000,000. The Subscriber will settle the Subscription Price in cash upon Completion. The Consideration was determined after arm's length negotiations among the parties to the Subscription Agreement on normal commercial terms with reference to the original consideration of the sub-licence of the optical engineering patents acquired by the SETD of HK$470,000,000, which was announced by the Company on 12 May 2016. The Consideration represented 30% of the enlarged value of SETD of HK$680,000,000, which is the addition of original consideration of the new energy patents with cash Consideration injected by the Subscriber.

Conditions precedent

Completion is conditional upon fulfilment of the following conditions:

1. the Subscriber having completed its due diligence in relation to SETD;
2. the passing of the requisite resolutions of the Shareholders at an extraordinary general meeting of the Company approving the Subscription Agreement and the transactions contemplated thereunder, and all other requisite approval and permit procedures having been completed; and
3. the warranties given by SETD under the Subscription Agreement remaining true and accurate in all material respects from the time they were made until the Completion Date.

The Subscriber has absolute discretion to waive conditions (1) and (3) above whilst condition (2) is incapable of being waived.

If any of the conditions above is not satisfied or waived within 6 months after the date of the Subscription Agreement (or such other date as the Subscriber and SETD may agree in writing), the Subscription Agreement shall lapse and there shall be no further liability on the parties (save in respect of any antecedent breach).

− 3 −

Completion

Completion shall take place on the tenth day following the fulfilment or waiver (as the case may be) of the conditions precedent in accordance with the terms of the Subscription Agreement.

INFORMATION ON SETD GROUP

As at the date of this announcement, the Company indirectly holds the entire issued share capital in SETD. SETD is a company incorporated in Hong Kong with limited liability with issued share capital of HK$10,000 divided into 10,000 shares. Upon completion, the number of issued shares of SETD will be increased to 14,286 shares, which will be held as to approximately 70% by the Group and approximately 30% by the Subscriber.

SETD Group is principally engaged in technological innovation and commercial applications of new energy, especially utilizing solar energy in an efficient and low-cost way, which is a patented technology invented by the Group's technology innovation team.

According to the unaudited financial statements of SETD which was prepared under the generally accepted accounting principles in Hong Kong, SETD's net liability value amounted to approximately RMB85.9 million (representing approximately HK$96.1 million) as at 31 December 2018. Set out below is the unaudited financial information of SETD for each of the years ended 31 December 2017 and 2018:

FINANCIAL EFFECT OF THE SUBSCRIPTION

Upon Completion, the Company's interest in SETD will be reduced from 100% to approximately 70%, resulting in a deemed disposal of approximately 30% shareholding in SETD Group by the Company. SETD will remain a subsidiary of the Company, and its results, assets and liabilities will continue to be consolidated into the financial statements of the Company. Given the Subscription does not result in a change of control, it will not recognise any gain or loss in the Company's income

− 4 −

statement. After taking into account the unaudited consolidated net liabilities value of SETD Group as at 30 June 2019 which amounted to approximately RMB103.0 million (representing approximately HK$115.3 million), and subject to changes, events and the provisions to be made, if any, subsequent to 30 June 2019, the deemed disposal as a result of the Subscription is estimated to have a surplus of approximately RMB155.3 million (representing approximately HK$173.9 million) to be recognised in equity and attributed to the owners of the Company in the Company's consolidated financial statements prepared under the Hong Kong Financial Reporting Standards for the corresponding financial period.

PROPOSED USE OF PROCEEDS

The net proceeds from the Subscription is estimated to be approximately HK$199.0 million. Pursuant to the Subscription Agreement, such net proceeds shall be applied to SETD to develop innovative photovoltaic technology and related business in Hong Kong or other regions.

INFORMATION ON THE GROUP

The Group is a leading ICT solution provider, which focuses on the new ICT research and development and high-end manufacturing, whilst spearheading into three different business segments, namely ICT, new energy and investment activities.

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION

The Group has commenced the business in new energy segment during the year ended 31 December 2017. Since then, we have been promoting this innovative technology in the market. On 19 January 2017, we formed strategic cooperation regarding production and marketing of solar electrical system with patents with CECEP Solar Energy Technology Co., Ltd. On 8 September 2017, we formed strategic cooperation regarding upgrading photovoltaic power plant and establishment of production plant for solar energy products with the owners of centralised photovoltaic power plant located in Shandong Province. On 4 July 2019, we entered into integrated energy base framework agreement with Lingwu Municipal People's Government, CGN New Energy Investment (Shenzhen) Company Limited Ningxia Branch and Ningxia Jiguang New Energy Company Limited. On 19 August 2019, we entered into strategic cooperation agreement for mirror array photovoltaic technology in ASEAN, Australia and New Zealand with Hongda Energy And Telecom Sdn Bhd.. In order to demonstrate the superior performance of this innovative technology as compared with the conventional photovoltaic power generation technology, the Group's technology innovation team provided technology support for a photovoltaic power plant at Nanning City, Guangxi Province to build a trial site in 2019. The power generation result was verified by an independent testing centre. Based on that verification report, an authoritative solar energy association published

− 5 −

a report concluding that there is broad application prospect of this technology in the market. We have also started to look for suitable site to build the same kind of innovative photovoltaic power plant in Hong Kong. The Board considers entering into the Subscription Agreement to be an important and efficient source of capital for the development of business in new energy segment. Accordingly, the Directors (including the independent non-executive Directors) consider that the terms of the Subscription Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

The Subscription constitutes a deemed disposal of the Group's equity interest in SETD under Rule 14.29 of the Listing Rules and the Subscription constitutes a major transaction for the Company under the Listing Rules. The Subscription Agreement and the transactions contemplated thereunder are therefore subject to the reporting, announcement and shareholders' approval requirement under the Listing Rules. An EGM will be convened by the Company to consider and, if thought fit, approve the Subscription Agreement and the transactions contemplated thereunder.

GENERAL

A circular containing details of the Subscription Agreement, a notice convening the EGM and other information required under the Listing Rules will be despatched to the Shareholders on or before 31 January 2020 so as to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

Since the Subscription is subject to the fulfilment of the conditions set out in the Subscription Agreement, and may or may not proceed to Completion, Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

DEFINITIONS

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

− 6 −

− 7 −

For illustration purpose only, sums in HK$ and RMB in this announcement are translated at the exchange rate of HK$1 = RMB0.89327. No representation is made that any amount in the respective currencies could have been converted at that rate or any other rates.

By order of the Board

China All Access (Holdings) Limited

Shao Kwok Keung

Chief Executive Officer

Hong Kong, 3 January 2020

As at the date of this announcement, the executive Directors are Mr. Chan Yuen Ming and Mr. Shao Kwok Keung; the non-executive Director is Mr. Bao Tiejun; and the independent non-executive Directors are Mr. Wong Che Man Eddy, Mr. Lam Kin Hung Patrick and Mr. Tam Sui Kwan.

− 8 −