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.

China Baoli Technologies Holdings Limited

中國寶力科技控股有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 164)

FULFILLMENT OF RESUMPTION CONDITIONS

AND

RESUMPTION OF TRADING

This announcement is made by China Baoli Technologies Holdings Limited (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09(2)(a) of the Listing Rules and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

References are made to (i) the announcements of the Company dated 28 June 2019, 12 July 2019, 27 September 2019, 31 December 2019, 31 March 2020, 29 June 2020, 30 September 2020 and 29 December 2020 in relation to, among other things, the progress of fulfillment of the resumption conditions of the Company (the "Announcements"); (ii) the announcements of the Company dated 31 August 2020 and 14 October 2020 and annual report published by the Company on 8 September 2020 in relation to, among other things, the annual results of the Company for the year ended 31 March 2020 (the "Annual Results Announcements"); and (iii) the announcement of the Company dated 27 November 2020 and interim report published by the Company on 30 December 2020 in relation to, among other things, the interim results of the Company for the six months ended 30 September 2020 (the "Interim Results Announcements"). Unless otherwise stated, capitalised terms used herein shall have the same meanings as those defined in the Announcements, the Annual Results Announcements and the Interim Results Announcements.

BACKGROUND

Trading of the Shares has been suspended on the Stock Exchange with effect from 9:00 a.m. on 2 July 2019 due to the delay in publication of the 2018-19 Annual Results pursuant to the requirements of Rule 13.50 of the Listing Rules.

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As disclosed in the announcement of the Company dated 12 July 2019, on 11 July 2019, the Company received a letter (the "Resumption Guidance Letter") from the Stock Exchange in relation to, among other things, the Resumption Conditions (as defined below). As set out in the Resumption Guidance Letter, the Company must remedy the issues causing its trading suspension and fully comply with the Listing Rules to the Stock Exchange's satisfaction before trading in the Shares is allowed to resume.

THE RESUMPTION CONDITIONS

The Stock Exchange sets out the following resumption conditions (the "Resumption Condition(s)") in the Resumption Guidance Letter:

  1. to publish all outstanding financial results required by the Listing Rules and address any audit qualifications, if any;
  2. to demonstrate its compliance with Rule 13.24 of the Listing Rules; and
  3. to inform the market of all material information for the Company's shareholders and investors to appraise the Company's position.

FULFILLMENT OF THE RESUMPTION CONDITIONS

The Company is pleased to announce that, as at the date of this announcement, each of the Resumption Conditions has been fulfilled, details of which are set out below.

  1. Publishing all outstanding financial results and addressing audit qualifications
    The Company has published all outstanding financial results fully in compliance with the requirements of the Listing Rules. The Company announced the 2018-19 Annual Results on 12 July 2019, and published the 2018-19 Annual Report on 31 July 2019. Also, the 2019-20 Annual Results was announced on 31 August 2020, and the 2019-20 Annual Report was published on 8 September 2020.
    In the 2019-20 Annual Report, the Auditor issued a disclaimer of opinion in relation to (a) limitation of scope on prior year's scope limitation affecting comparative figures and related disclosures; (b) limitation of scope on loss on deconsolidation of We Fly Travel Limited; (c) limitation of scope on share of results and derecognition of interests in associates; and (d) multiple fundamental uncertainties relating to going concern (the "Audit Qualification(s)").
    Reference is made to the Annual Results Announcements. The Company explained the background and its view on the Audit Qualification (a) to (c). It was expected that the Audit Qualification (a) to (c) would not appear in the consolidated financial statements of the Company for the financial year ending 31 March 2022.

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Below is the table setting out the detailed information of the Audit Qualifications (a) to (c).

Expected time

to remove

the Audit

Qualifications

as confirmed

Reasons for the

Basis for removal of the

with the

Audit Qualifications

Audit Qualifications

Audit Qualifications

Auditor

(a)

Limitation of

The Auditor were of the view that

The

Directors

have

discussed

During the financial

scope on prior

no sufficient evidence as to whether

with the Auditor and are of the

year

ending

year's scope

the Group's shares of result and

view that the limitation of scope

31 March 2022

limitation

impairment loss of the Yota Group

is an one-off,non-recurring

affecting

for the year ended 31 March 2019

incident which will only affect the

comparative

were fairly stated and whether the

comparative figures in relation to

figures and

summarised

financial information

Yota but not the opening balance

related

of the Yota Group as shown in

on

the

consolidated

financial

disclosures

Note 21 to the 2019 Consolidated

statements of the Company for

Financial Statements were properly

the year ending 31 March 2021.

disclosed.

(b)

Limitation

The Auditor expressed they were

As discussed with the Auditor,

During the financial

of scope

unable to access

to

the books

the Directors are of the view that

year

ending

on loss on

and records of We Fly since the

the limitation of scope is an one-

31 March 2022

deconsolidation

Deconsolidation Date,

and

were

off, non-recurring incident which

of We Fly

not able to carry out procedures

will only affect the comparative

Travel Limited

which they considered necessary on

figures in relation to We Fly but

the books and records of We Fly.

not the opening balance on the

consolidated financial statements

of the Company for the year

ending 31 March 2021.

(c)

Limitation of

The Auditor expressed they had

The

Directors

have

discussed

During the financial

scope on share

not been provided with sufficient

with the Auditor and are of the

year

ending

of results and

and appropriate

audit

evidence,

view that the limitation of scope

31 March 2022

derecognition

including

information

and

is an one-off,non-recurring

of interests in

explanations,

to

ascertain

the

incident which will only affect the

associates

financial position of the Yota

comparative figures in relation to

Group as at the Derecognition

Yota but not the opening balance

Date and its result of operations

on

the

consolidated

financial

for the period from 1 April 2019

statements of the Company for

to the Derecognition Date.

the year ending 31 March 2021.

Accordingly, the Resumption Condition of publishing all outstanding financial results and addressing audit qualifications has been fulfilled.

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  1. Compliance with Rule 13.24 of the Listing Rules
    The Group is currently principally engaged in, inter alia, multi-media technologies business (the "Multi-MediaTechnologies Business") and gamma ray irradiation services (the "Gamma Ray Business").
    The Multi-Media Technologies Business
    The Group has operated the multi-media advertising platform via different media channels including train media platform, display media platform and online media platform by using the knowhow and expertise which has been developed and accumulated since 2016. Brand owners can disseminate information on such platform developed and provided by the Group. The Group also provides services to its clients in relation to producing high-quality and tailor-mademulti-media contents.
    References are made to the announcements of the Company dated 29 March 2019, 10 May 2019 and 6 June 2019. On 6 June 2019, the Group completed the acquisition of the entire equity interests of two outdoor advertisement and media companies, Hong Kong Made (Media) Limited ("HK Made") and Ample Success Limited ("Ample Success"). Both companies are principally engaged in the business of development and operations of outdoor multi-media contents, and they possess the exclusive rights to
    provide advertising agency services and related production services on Guangzhou- Shenzhen China Railway High-speed Harmony Series trains (廣深線和諧號) (the "GSCR Hexiehao Trains"). Through such acquisition, the Group is entitled to an exclusive usage of and the operating right to the 25 trains of GSCR Hexiehao Trains. The agency agreement of HK Made will last until 30 June 2022 and HK Made will enjoy an exclusive right to renew the agreement for not less than three years until 30 June 2025. Similarly, the agency agreement of Ample Success will last until 31 May 2022 and Ample Success will enjoy an exclusive right to renew the agreement for not less than three years until 30 June 2025.
    Reference is also made to the announcement of the Company dated 13 July 2020. On
    23 July 2020, the Group further completed the acquisition of 80% of the entire issued share capital of ShenZhen ZiJun Media Company Limited* (深圳釨駿傳媒有限公司) ("Zijun Media"). Zijun Media has extensive experience in coordinating the operation of train media business in mainland China and is the Company's agent organising and coordinating the operation of the Company's multi-media and advertising platform
    business. Zijun Media is authorised to be an agent for placing multi-media contents on 5 trains of Guangzhou Zuhai China Railway High-Speed Trains (廣珠城際列車) (the "GZCR Trains"). The authorisation will last until 31 December 2022.
    As such, the Group conducts its train media platform business through its subsidiaries, namely HK Made, Ample Success and Zijun Media. The multi-media contents of some
    clients will be displayed on the GSCR Hexiehao Trains, the GZCR Trains and the Kowloon Canton Railway Through Train (九廣通) ("Ktt"). They are transport and
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other panels in the Guangdong-HongKong-Macao Greater Bay Area. The Group obtained the exclusive right of and operation right for publication of multi-media contents in the Ktt by entering into an agreement with MTR Corporation Limited on 31 October 2017. This agreement has already expired on 31 October 2020. The Group has first right for renewal. Given the Ktt was suspended in 2020 because of COVID-19 pandemic, the Group plans to resume such agreement once the COVID-19 pandemic is subsided.

In light of the suspension of work, quarantine measures and travel restrictions imposed due to the outbreak of the COVID-19 pandemic in 2020, most of the railway transport network services in mainland China have been largely reduced or suspended. As a result, the performance of the train media business of the Group has inevitably been affected. Most of the contract renewals of the Company's existing clients and new marketing plans for new clients were either halted or postponed in 2020.

Following the COVID-19 pandemic has subsided recently, there is significant improvement in the train media business of the Group in the fourth quarter of 2020. The Group has proactively entered into new multi-media advertising contracts with new customers and renewed existing multi-media advertising contracts with existing customers. These customers engaged in different type of business, including consumer products, mobile communications, automobile manufacturing, food manufacturing, service provider, beauty and financial institution. Some of them are listed companies in Hong Kong or state-owned enterprise of mainland China. As a result, the number of clients for placing multi-media contents has increased substantially.

As at the end of January 2021, the Group has 13 multi-media advertising contracts under implementation with an aggregate amount of approximately RMB95 million. As at the date of this announcement, there are approximately 14 multi-media contracts under negotiation with an aggregate amount of RMB41 million.

In order to strengthen the Company's market position and diversify the multi-media technologies and advertising platforms, the Group keeps looking for opportunities in expanding its multi-media platforms business. In addition to the train media business, the Group is in negotiation with another multi-media advertising platform owner in relation to the right of displaying multi-media contents on building walls. The Group will design multi-media contents and display using LED on the whole exterior of the building.

Besides, the Group's business operations have been substantially strengthened by entering into a business cooperation with the Group's business partners to form a joint venture company (the "JV Company") as disclosed in the announcement of the Company dated 6 November 2020. The JV Company is principally engaged in providing an influencer marketing platform, online live streaming, brand management and ancillary online/offline e-commerce marketing services. It is expected that the

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exploration to the online influencer market through the JV Company would allow the Group to diversify its existing marketing platforms and catch up with the growth of the e-commerce sector. The formation of the JV Company can create additional revenue to the Multi-Media Technologies Business.

The Group has a team of 20 management expertise and personnel operating the Multi- Media Technologies Business. Among all the 20 management expertise and personnel, there are seven management expertise, each armed with extensive experience and qualification. Five of them are responsible for the marketing and sales of the Multi- Media Technologies Business, and the other two are responsible for operation and management of the Multi-Media Technologies Business. Most of them have more than 10 years of experiences in related disciplines.

For the ten months ended 31 January 2021, the unaudited revenue generated from the Multi-Media Technologies Business is approximately HK$43 million with the gross profit margin of approximately 20.9% and it is expected to record a profit in this segment. As at the date of this announcement, the Group has been generating positive cashflow. It represents a significant improvement and the Multi-Media Technologies Business is regaining its momentum.

The Gamma Ray Business

The Gamma Ray Business has been principally in relation to the provision of irradiation sterilisation processing service by utilising gamma ray technologies.

Other than the provision of irradiation sterilisation processing service, the Group is actively seeking opportunities to diversify the application of gamma ray technologies of the Group to different aspect for widening the income stream of the Group. The Group is working with some reputable large-sized enterprises in mainland China in relation to the provision of real-time assessment and selection services in beneficiation and production of metal ores. The Group will utilise its gamma ray technologies combined with its authorised technology named "dry grinding and dry separation" to further develop its technology "gamma ray dry grinding and dry separation", and provide such technology to mainland enterprises so as to enhance the efficiency and productivity of the mining and beneficiation process. With the technologies to be provided to mainland enterprises, the Company is expected to widen the revenue stream from irradiation sterilisation processing service to gamma ray dry grinding and dry separation service. The Company will make further announcement(s) as and when appropriate.

As at the date of this announcement, the Group is in discussion of the details of the terms and conditions with certain mainland enterprises in relation to the aforementioned cooperation. The Company is of the view that the prospect of the metal ore industry is promising and with immense development potentials that values could be created to the Shareholders.

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Fund Raising Activities

The Company proposes to conduct (i) rights issue (the "Rights Issue"); and (ii) loan capitalisation (the "Loan Capitalisation").

The Rights Issue

The Company has contemplated a plan to conduct a rights issue with the gross proceeds for about HK$298 million (the "Rights Issue"). It is expected that the net proceeds from the Rights Issue (after deducting the professional fees and other related costs and expenses incurred in the Rights Issue) will be approximately HK$297 million. Among which, part of the proceeds will be used to reimburse the debts from current liabilities and non-current liabilities, including but not limited to (i) reimbursement for trade and other payables accounts; (ii) repayment for the license fee; and (iii) repayment for bank and other borrowings; and also, part of the proceeds will be applied as general working capital of the Group. The Company targets to undertake the Rights Issue after the Company issues its annual results for the financial year ended 31 March 2021, which are scheduled to be released on 30 June 2021. It is expected that the Rights Issue will be completed in the fourth quarter of 2021. Completion of the Rights Issue will be subject to, amongst others, the listing approval of the new Shares under the Rights Issue to be granted by the Stock Exchange, approval by the Shareholders and completion of the Loan Capitalisation (as defined below). The Company will keep exploring other fund raising opportunities depending on the market conditions and the business development of the Group from time to time for the best interest of the Company and the Shareholders as a whole.

The Loan Capitalisation

The Company has been in discussion with its creditors (the "Loan Capitalisation Creditors") and has a plan to issue new Shares (the "Loan Capitalisation Shares"). The subscription amount payable by the Loan Capitalisation Creditors shall be satisfied by capitalising the outstanding principal amount of the respective loans and the interest accrued thereon (the "Loan Capitalisation Amount") (the "Loan Capitalisation"). As at 30 September 2020, the aggregate of the Loan Capitalisation Amount is approximately HK$276,098,100. The Company targets to enter into formal agreements with the Loan Capitalisation Creditors in the third quarter of 2021, and the Loan Capitalisation is expected to be completed between September and October 2021. Completion of the Loan Capitalisation will be subject to, amongst others, the listing approval of the Loan Capitalisation Shares to be granted by the Stock Exchange, approval by the Shareholders and completion of the Rights Issue.

After the Loan Capitalisation, the debts of approximately HK$276 million from current liabilities will be settled through the conversion of debt to equity.

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As a result of the Rights Issue and Loan Capitalisation, the financial position of the Group will be significantly improved.

The Company is of the view that if the Rights Issue and the Loan Capitalisation can be materialised, together with the positive cash flow to be generated from the Multi- Media Technologies Business and the Gamma Ray Business, the Group will fulfill the requirement of Rule 13.24 of the Listing Rules. In light of the above, the Company regards that the Resumption Condition of complying Rule 13.24 of the Listing Rules has been fulfilled.

  1. Inform the market of all material information to appraise the Company's position
    The Company has, in accordance with the relevant requirements of the Listing Rules, disclosed the updated situation of the Group by way of announcements and financial reports from time to time.
    Since the suspension of the trading of the Shares on 2 July 2019, the Company has, in accordance with the requirements of the Listing Rules, informed the market the latest situation of the Company by way of publication of announcements/circulars/financial reports including (i) quarterly update on development of resumption progress; (ii) notifiable transactions; (iii) voluntary announcements on the updated situation of the Group; (iv) inside information; (v) change of board composition; (vi) financial results, its supplemental information and relevant notices; and (vii) other matters relating to the Company.

In light of the above, the Company regards that the Resumption Condition of informing market of the material information has been fulfilled.

FINANCIAL INFORMATION UPDATES

The Group has recorded an unaudited revenue of approximately HK$45 million for the ten months ended 31 January 2021. It demonstrates that the success of the Group's long- term strategies in business diversification which can help in achieving long-term sustainable growth of its businesses in preserving and enhancing the Shareholders' value.

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RESUMPTION OF TRADING

Trading in the Shares on the Stock Exchange has been suspended since 2 July 2019. As all the conditions under the Resumption Guidance have been fulfilled, the Company has made an application to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:00 a.m. on 7 April 2021.

By order of the Board

China Baoli Technologies Holdings Limited

Zhang Yi

Chairman

Hong Kong, 1 April 2021

As at the date of this announcement, the executive Directors are Mr. Zhang Yi (Chairman), Ms. Chu Wei Ning (Chief Executive Officer) and Ms. Lam Sze Man; and the independent non-executive Directors are Mr. Chan Fong Kong, Francis, Mr. Chan Kee Huen, Michael and Mr. Feng Man.

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China Baoli Technologies Holdings Limited published this content on 01 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 April 2021 14:53:10 UTC.