SDM : DISCLOSEABLE TRANSACTION

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

SDM Group Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8363)

DISCLOSEABLE TRANSACTION

On 1 September 2017 (after trading hours), the Subsidiary and the Investors entered into the Investment Agreements, pursuant to which the Investors agree to subscribe for and the Subsidiary agrees to allot and issue to the Investors the Subscription Shares of the Subsidiary at total investment amount of HK$10,500,000 upon closing of the Investment Agreements.

The transactions contemplated under the Investment Agreements constitute a discloseable transaction for the Company under Chapter 19 of the GEM Listing Rules.

THE INVESTMENT AGREEMENTS

On 1 September 2017 (after trading hours), the Subsidiary and the Investors entered into the Investment Agreements. The principal terms of the Investment Agreements are set out as follows:

Date: 1 September 2017

Parties: (1) The Investors: Chik Kai Fun Christina

Tam Pak Sze Catherine Wong Lai Kwan Miranda

(2) The Subsidiary: Prism International Pre-School Limited, an

indirect wholly-owned subsidiary of the Company prior to the closing of the Issue

Issue: the Investors agree to subscribe for and the Subsidiary agrees to allot and issue to the Investors the Subscription Shares of the Subsidiary, representing a total of 35% of the enlarged entire issued share capital of the Subsidiary. The shareholding of each of the Investors in the Subsidiary upon closing of the Issue is set out below:

1. Chik Kai Fun Christina: 10%

2. Tam Pak Sze Catherine: 10%

3. Wong Lai Kwan Miranda: 15%

Investment Amount:

The total investment amount of the Subscription Shares is HK$10,500,000 payable upon closing of the Investment Agreements. The investment amount payable by each of the Investors is set out below:

1. Chik Kai Fun Christina: HK$3,000,000

2. Tam Pak Sze Catherine: HK$3,000,000

3. Wong Lai Kwan Miranda: HK$4,500,000

The investment amount was determined based on the estimated set-up costs and future working capital of the Subsidiary.

Put Option: Each of the Investors shall have the right during the period of six (6) months or such other period to be mutually agreed by the parties to the respective Investment Agreements commencing from the issue date of the audited financial statements of the Subsidiary for the financial year ending 31 December 2022, to require the Subsidiary to purchase all (but not part) of the outstanding shares of the Subsidiary held by such Investor at an option price to be determined based on five times of the actual net profit after tax of the Subsidiary for the financial year ending 31 December 2022 and the then shareholding of the respective Investor in the Subsidiary.

To the best of knowledge of the Directors, information and belief, after having made all reasonable enquiries, the Investors are individual investors and are independent third parties of the Company and its connected persons.

The closing of the transaction contemplated under the Investment Agreements has been taken place on the date of the Investment Agreements. Upon closing of the Issue, the Company indirectly holds 65% of the enlarged entire issued share capital of the Subsidiary and the Investors hold 35% of the enlarged entire issued share capital of the Subsidiary. The Subsidiary is continued to be a subsidiary of the Company after closing of the Issue.

REASONS FOR ENTERING INTO THE INVESTMENT AGREEMENTS

The Group is principally engaged in (i) the business of jazz and ballet and pop dance academy in Hong Kong and the PRC; and (ii) the operation of day care centers, kindergartens and indoor theme-based kid clubs in Shenzhen, the PRC.

The Subsidiary is principally engaged in the operation of kindergarten business in Kowloon Tong. The Subsidiary is in the course of obtaining the necessary licences or approvals for the operation of the kindergarten, the kindergarten is yet to commence business in this academic year. In order to obtain further funding for the operation of the business, the Subsidiary entered into the Investment Agreements with the Investors.

The Directors consider that the terms of the Investment Agreements are on normal commercial terms, fair and reasonable and are in the interests of the Company and its shareholders as a whole.

USE OF PROCEEDS FROM THE ISSUE

The Investment Amount received from the Investors under the Issue shall be mainly used and applied for set-up costs and future working capital of the Subsidiary.

GEM LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios calculated under the GEM Listing Rules in respect of the Issue exceed 5% but are below 25%, the transactions contemplated under the Investment Agreements constitute a discloseable transaction for the Company and is subject to the notification and announcement requirements under Chapter 19 of the GEM Listing Rules.

DEFINITIONS

In this announcement, the following terms have the following meanings:

''Company'' SDM Group Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the GEM of the Stock Exchange

''Directors'' the directors of the Company

''GEM'' the Growth Enterprise Market of the Stock Exchange ''GEM Listing Rules'' The Rules Governing the Listing of Securities on the GEM ''Group'' the Company and its subsidiaries

''HK$'' Hong Kong dollars, the lawful currency of Hong Kong

''Hong Kong'' the Hong Kong Special Administrative Region of the PRC

''Investment Agreements'' three separate investment agreements dated 1 September

2017 entered into between the Subsidiary and the Investors respectively in respect of the Issue

''Investor(s)'' Chik Kai Fun Christina, Tam Pak Sze Catherine and Wong Lai Kwan Miranda

''Issue'' the allotment and issue by the Subsidiary to the Investors of the Subscription Shares at a total investment amount of HK$10,500,000

''PRC'' the People's Republic of China

''Stock Exchange'' The Stock Exchange of Hong Kong Limited

''Subscription Shares'' new shares of the Subsidiary to be issued to the Investors,

representing a total of 35% of the enlarged entire issued share capital of the Subsidiary

''Subsidiary'' Prism International Pre-school Limited, an indirect wholly- owned subsidiary of the Company prior to the closing of the Issue

''%'' per cent.

By order of the Board

SDM Group Holdings Limited Mr. Chiu Ka Lok

Chairman

Hong Kong, 1 September 2017

As at the date of this announcement, the executive Directors are Mr. Chiu Ka Lok, Mr. Chun Chi Ngon Richard, the non-executive Directors are Dr. Chun Chun and Ms. Yeung Siu Foon and the independent non-executive Directors are Mr. Lau Sik Yuen, Dr. Yuen Man Chun Royce and Mr. Lee Kwok Ho David.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain at www.hkgem.com on the ''Latest Company Announcements'' page of the GEM website for at least 7 days from the date of its posting and on the Company website at www.sdm.hk.