China Zhongwang : ANNOUNCEMENT UPDATE ON THE PROPOSED SPIN-OFF OF LIAONING ZHONGWANG GROUP THROUGH ASSET RESTRUCTURING WITH CRED HOLDING

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(incorporated in the Cayman Islands with limited liability)

(Stock Code: 01333)

ANNOUNCEMENT

UPDATE ON THE PROPOSED SPIN-OFF OF LIAONING ZHONGWANG GROUP

THROUGH ASSET RESTRUCTURING WITH CRED HOLDING

We refer to the announcement dated 20 March 2020 (the ''Announcement'') of China Zhongwang Holdings Limited (the ''Company'') in relation to, among others, the proposed Zhongwang Asset Restructuring of the Company, pursuant to which, (i) Zhongwang Fabrication has agreed to sell and CRED Holding has agreed to purchase the 96.55% equity interests in Liaoning Zhongwang held by Zhongwang Fabrication at a consideration of RMB29,448,275,862 (the ''Disposal of Liaoning Zhongwang'') and (ii) CRED Holding has agreed to sell and Zhongwang Fabrication has agreed to purchase the 100% equity interests in CRED Xinjiang held by CRED Holding at a consideration of RMB200 million (the ''Acquisition of CRED Xinjiang'') and both considerations will be offset against each other and the balance, i.e., the Transfer Consideration of RMB29,248,275,862, will be satisfied by the issuance of 4,748,096,730 shares by CRED Holding to Zhongwang Fabrication, representing 86.36% equity interests in CRED Holding as enlarged by the issuance of the Consideration Shares (the ''Issue of Zhongwang Consideration Shares''). Unless otherwise stated, the capitalized terms in this announcement shall have the same meaning as those used in the Announcement.

On 14 April 2020, the Company received a notice from CRED Holding that it published an announcement in relation to its responses to review comments of its proposed material assets restructuring from the Shanghai Stock Exchange.

The Shareholders are reminded that the Zhongwang Asset Restructuring and the Proposed Spin-off are subject to various regulatory and corporate approvals (including the approval by CSRC and the Stock Exchange) and may or may not proceed.

In particular, as disclosed in the Announcement, based on the size test results, the Disposal of Liaoning Zhongwang, the Acquisition of CRED Xinjiang and the acquisition of CRED Holding through the Issue of Zhongwang Consideration Shares by CRED Holding are all discloseable transactions of the Company. Given the materiality of the Proposed Spin-off, the Company will voluntarily treat the Disposal of Liaoning Zhongwang as if it were a major transaction of the Company and therefore the Disposal of Liaoning Zhongwang and the Proposed Spin-off will be subject to, among other things, the approval of the

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Shareholders. While the Acquisition of CRED Xinjiang and the acquisition of CRED Holding through the Issue of Zhongwang Consideration Shares by CRED Holding are only discloseable transactions of the Company not subject to the approval of the Shareholders, given all arrangements are made pursuant to the Asset Transfer Agreement and the Compensation Agreement, the Zhongwang Asset Restructuring and the Proposed Spin-off will not materialize without the Shareholders' approval of the Disposal of Liaoning Zhongwang and the Proposed Spin-off.

Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company.

By order of the Board

China Zhongwang Holdings Limited

Chairman

Lu Changqing

Hong Kong, 14 April 2020

As at the date of this announcement, the Board consists of:

Executive Directors

Mr. Lu Changqing and Ms. Ma Qingmei

Non-executive Directors

Mr. Chen Yan, Mr. Lin Jun and Mr. Wei Qiang

Independent Non-executive Directors

Mr. Wong Chun Wa, Mr. Wen Xianjun, Mr. Shi Ketong and Mr. Lo Wa Kei, Roy

* For identification purpose only

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