Sansheng : DISCLOSEABLE TRANSACTION ACQUISITION OF EQUITY INTEREST IN TIANYU XINYE

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Sansheng Holdings (Group) Co. Ltd.

三 盛 控 股（ 集 團 ）有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2183)

DISCLOSEABLE TRANSACTION

ACQUISITION OF EQUITY INTEREST IN

TIANYU XINYE

INTRODUCTION

The Board hereby announces that on 20 August 2020, Xian Sansheng Xingfu (an indirect non-wholly owned subsidiary of the Company), as the purchaser, and Shaanxi Qinghua and Hou Sen (候森), as the vendors, entered into the Agreement, pursuant to which Xian Sansheng Xingfu has agreed to acquire and the Vendors have agreed to transfer to Xian Sansheng Xingfu, 100% equity interest in the Target Company at a consideration of RMB165,117,300.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Agreement and the transactions contemplated thereunder is more than 5% but all are less than 25%, the entering into of the Agreement and the transactions contemplated thereunder constitute a discloseable transaction of the Company and are subject to the reporting and announcement requirements but exempt from the circular and shareholders' approval requirement under Chapter 14 of the Listing Rules.

INTRODUCTION

The Board hereby announces that on 20 August 2020, Xian Sansheng Xingfu (an indirect non-wholly owned subsidiary of the Company), as the purchaser, and Shaanxi Qinghua and Hou Sen (候森), as the vendors, entered into the Agreement, pursuant to which Xian Sansheng Xingfu has agreed to acquire and the Vendors have agreed to transfer to Xian Sansheng Xingfu, 100% equity interest in the Target Company at a consideration of RMB165,117,300.

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AGREEMENT

The following sets forth a summary of the principal terms of the Agreement:

Date

20 August 2020

Parties

1. Shaanxi Qinghua and Hou Sen (as vendors);
2. Xian Sansheng Xingfu (as purchaser);
3. Hou Youqing (候有慶) (as guarantor of the vendors);
4. Fuzhou Sansheng (as guarantor of the purchaser); and
5. Tianyu Xinye (as the target company).

Subject Matter

Pursuant to the Agreement, Xian Sansheng Xingfu has agreed to acquire and the Vendors have agreed to transfer 100% equity interest in the Target Company at a consideration of RMB165,117,300.

As at the date of this announcement, the Target Company has a registered capital of RMB128,600,000 and is directly held as to 77.76% by Shaanxi Qinghua and 22.24% by Hou Sen. Upon the completion of the abovementioned equity transfer from the Vendors to Xian Sansheng Xingfu, Xian Sansheng Xingfu will directly holds the entire equity interest in the Target Company.

The Target Company holds the land use rights of a parcel of land of approximately 44,031 sq.m. in Hantai District, Hanzhong City.

Consideration

Pursuant to the Agreement, the consideration for the acquisition of 100% equity interest in the Target Company by Xian Sansheng Xingfu shall be RMB165,117,300.

The Consideration was arrived at normal commercial terms and after arm's length negotiations amongst parties to the Agreement, with reference to the amount of existing debts of the Target Company, taking into account the average market price of similar land parcels in the proximity in the past three years, recent average market price of the residential properties in the proximity and the expected economic benefits to the Group after completion of the Agreement.

The Consideration will be financed by the internal sources of funds of the Group.

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Payment Terms

The Consideration shall be payable by Xian Sansheng Xingfu in the following manner: -

1. the first installment of RMB84,699,823 shall be payable within 3 business days after the Vendors have delivered the land ready for development and transferred 51% equity interest in the Target Company to Xian Sansheng Xingfu;
2. the second installment of RMB32,823,460 shall be payable within 3 business days after Xian Sansheng Xingfu has obtained loans from land financing institutions and the Vendors have transferred 20% equity interest in the Target Company to Xian Sansheng Xingfu;
3. the third installment of RMB14,770,557 shall be payable within 3 business days after the Target Company has obtained the construction permit and the Vendors have transferred 9% equity interest in the Target Company to Xian Sansheng Xingfu; and
4. the fourth installment of RMB32,823,460 shall be payable within 3 business days after the Target Company has obtained the pre-sale permit and the Vendors have transferred 20% equity interest in the Target Company to Xian Sansheng Xingfu.

Completion

Completion of the Acquisition shall take place on the day when all filing and registration procedures with the relevant PRC authorities in relation to the transfer of the 100% equity interest in the Target Company to Xian Sansheng Xingfu are completed and the Consideration is fully settled.

Guarantees

Pursuant to the Agreement, Hou Youqing shall provide guarantee in respect of the performance obligations of Shaanxi Qinghua and Hou Sen, and Fuzhou Sansheng shall provide guarantee in respect of the performance obligations of Xian Sansheng Xingfu.

INFORMATION ON THE TARGET COMPANY

The Target Company is a company established under the laws of the PRC with limited liability on 7 March 2019. The Target Company is principally engaged in property development.

The principal asset of the Target Company is the land use rights of a parcel of land of approximately 44,031 sq.m. located at the east of Yizhou Road and the north of Bowang Road, Hantai District, Hanzhong City, Shaanxi Province, the PRC. It is planned for residential use and has an expected aggregate GFA of 115,362 sq.m.

As at the date of this announcement, the Target Company is directly held as to 77.76% by Shaanxi Qinghua and 22.24% by Hou Sen.

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Based on the financial statements of the Target Company prepared in accordance with PRC Accounting Standards, the financial information of the Target Company for the period from 7 March 2019 (date of establishment) to 31 December 2019 was as follows:

The unaudited total asset value of the Target Company as at 30 June 2020 was approximately RMB129,193,493.

INFORMATION ON THE GROUP AND THE PARTIES OF THE AGREEMENT

The Company is an investment holding company and its subsidiaries are principally engaged in property development and property investment.

Xian Sansheng Xingfu is an indirect non-wholly owned subsidiary of the Company, which is principally engaged in property development.

Shaanxi Qinghua is a company established under the laws of the PRC with limited liability. It is principally engaged in property development.

Fuzhou Sansheng (the guarantor of the purchaser) is a company established under the laws of the PRC with limited liability and principally engaged in property development.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries:

1. Shaanxi Qinghua and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons; and
2. Hou Sen and Hou Youqing are third parties independent of the Company and its connected persons.

REASONS FOR AND BENEFITS OF THE ACQUISITION

It has been a long-established business strategy of the Group to focus on and expand the existing principal business (i.e. property development and investment). The Board considers that the entering into of the Agreement would enable the Group to expand its land bank which is consistent with its business strategy.

Having considered the above, the Board is of the view that the terms of the Agreement are normal commercial terms, fair and reasonable and in the interest of the Company and the Shareholders as a whole.

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LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Agreement and the transactions contemplated thereunder is more than 5% but all are less than 25%, the entering into of the Agreement and the transactions contemplated thereunder constitute a discloseable transaction of the Company and are subject to the reporting and announcement requirements but exempt from the circular and shareholders' approval requirement under Chapter 14 of the Listing Rules.

DEFINITIONS

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

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• The English translation of the Chinese names denoted in this announcement is for illustration purpose only. Should there be any inconsistencies, the Chinese names prevail.

By order of the Board

Sansheng Holdings (Group) Co. Ltd.

Lin Rongbin

Chairman

Hong Kong, 20 August 2020

As at the date of this announcement, the Board comprises two executive directors, namely Mr. Lin Rongbin and Ms. Cheng Xuan; two non-executive directors, namely Mr. Xiao Zhong and Mr. Xu Jianwen; and three independent non-executive directors, namely Mr. Pan Dexiang, Mr. Yuan Chun and Mr. Zhong Bin.

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