Xingfa Aluminium : CONTINUING CONNECTED TRANSACTIONS - (1) MASTER SUPPLY AGREEMENTS AND (2) LICENCE AND SERVICE AGREEMENT

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.

XINGFA ALUMINIUM HOLDINGS LIMITED

興 發 鋁 業 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 98)

CONTINUING CONNECTED TRANSACTIONS -

1. 1. 1. MASTER SUPPLY AGREEMENTS AND
   2. LICENCE AND SERVICE AGREEMENT
2. MASTER SUPPLY AGREEMENT A

The Company wishes to announce that on 12 July 2019, Guangdong Xingfa, an indirectly wholly-owned subsidiary of the Company, and China Lesso, a substantial Shareholder, entered into the Master Supply Agreement A pursuant to which Guangdong Xingfa Group members, as suppliers, would supply and China Lesso Group members, as purchasers, would purchase aluminium profiles and/or panels supplied by Guangdong Xingfa Group members on an on-going basis.

In view of the fact that the Company is owned as to approximately 26.28% by China Lesso through its directly wholly-owned subsidiary as at the date of this announcement, China Lesso is a substantial Shareholder and a connected person of the Company under the Listing Rules. Accordingly, the transactions contemplated under the Master Supply Agreement A constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

As each of the applicable percentage ratios relating to the Annual Cap for the continuing connected transactions contemplated under the Master Supply Agreement A is less than 5%, the continuing connected transactions under the Master Supply Agreement A are subject to the reporting, announcement and annual review requirements but exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

1

(2) MASTER SUPPLY AGREEMENT B

On 12 July 2019, Guangdong Xingfa and Jiangxi Jingxing entered into the Master Supply Agreement B pursuant to which Guangdong Xingfa Group members, as suppliers, would supply and Jiangxi Jingxing, as purchaser, would purchase aluminium profiles supplied by Guangdong Xingfa Group members on an on-going basis.

Before the Relevant Date, the transactions contemplated under the Master Supply Agreement B were continuing transactions between the Group and a non-wholly owned subsidiary which is accounted for as an associate. Commencing from the Relevant Date, Jiangxi Jingxing has become a connected subsidiary of the Company. Accordingly, commencing from the Relevant Date, the transactions contemplated under the Master Supply Agreement B constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

As each of the applicable percentage ratios relating to the Annual Cap for the continuing connected transactions contemplated under the Master Supply Agreement B is less than 5%, the continuing connected transactions under the Master Supply Agreement B are subject to the reporting, announcement and annual review requirements but exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

(3) LICENCE AND SERVICE AGREEMENT

On 1 January 2019, Jiangxi Jingxing and Guangzhou Jingxing entered into the Licence and Service Agreement pursuant to which Guangzhou Jingxing agreed to grant to Jiangxi Jingxing a right to use of the Patents and provide other related technologies and services.

Before the Relevant Date, the transactions contemplated under the Licence and Service Agreement were continuing transactions between the Group and a connected person (i.e. Guangzhou Jingxing) exempt under the "insignificant subsidiary exemption". Commencing from the Relevant Date, Guangzhou Jingxing has become a connected person at the issuer level as it has become a non-wholly owned subsidiary of China Lesso.

As each of the applicable percentage ratios relating to the Annual Cap for the continuing connected transactions under the Licence and Service Agreement, on an annual basis, is less than 5%, the continuing connected transactions under the Licence and Service Agreement are subject to the reporting, announcement and annual review requirements but exempt from the independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

2

MASTER SUPPLY AGREEMENT A

On 12 July 2019, Guangdong Xingfa and China Lesso entered into the Master Supply Agreement A pursuant to which Guangdong Xingfa Group members, as suppliers, would supply and China Lesso Group members, as purchasers, would purchase aluminium profiles and/or panels supplied by Guangdong Xingfa Group members on an on-going basis. Major terms of the Master Supply Agreement A are set out below:

Date		12 July 2019
Parties
Supplier(s)	:	Guangdong Xingfa, a wholly foreign owned enterprise
		established in the PRC and an indirect wholly-owned
		subsidiary of the Company, and its subsidiaries from time
		to time and for the avoidance of doubt, including Jiangxi
		Jingxing.
Purchaser(s)	:	China Lesso, its subsidiaries and/or any company in
		the equity capital of which China Lesso and/or any of
		its subsidiaries taken together are directly or indirectly
		interested so as to exercise or control the exercise of 30% (or
		such other threshold as may from time to time be specified
		in the Takeovers Code as being the level for triggering a
		mandatory general offer) or more of the voting power at
		general meetings from time to time.
		China Lesso is a company incorporated in the Cayman
		Islands with limited liability and is interested in
		approximately 26.28% of the equity interest of the Company
		through its directly wholly-owned subsidiary as at the
		date of this announcement. Accordingly, China Lesso is
		a substantial Shareholder and a connected person of the
		Company under the Listing Rules. The principal business
		activities of China Lesso are the manufacture and sale
		of building materials and interior decoration products;
		the provision of renovation and installation works,
		environmental engineering and other related services,
		financial services and property rental and other related
		services.

3

Duration

The Master Supply Agreement A is for a term from 9 July 2019 to 31 December 2019 (both dates inclusive).

Subject matter

Pursuant to the Master Supply Agreement A, Guangdong Xingfa Group members, as suppliers, would sell to China Lesso Group members, as purchasers, aluminium profiles and/or panels specified by members of the China Lesso Group members. The aluminium profiles and/or panels to be purchased by China Lesso Group members will be further processed into building materials, interior decoration products and renovation and installation materials and sold to their customers. There is no minimum supply amount under the Master Supply Agreement A and any Guangdong Xingfa Group member is not contractually bound to supply, in response to a purchase order placed, to any China Lesso Group member any products referred to in any purchase order. The aluminium profiles and/or panels to be supplied by Guangdong Xingfa Group to China Lesso Group will be in accordance with the specifications of China Lesso Group members if accepted by the Guangdong Xingfa Group members, on a case by case basis.

Pricing and payment terms

Pursuant to the Master Supply Agreement A, the prices, payment terms, specifications and detailed terms with respect to the aluminium profiles and/or panels to be sold by Guangdong Xingfa Group members shall be determined in accordance with the specific orders to be agreed between Guangdong Xingfa Group members and China Lesso Group members which shall be on normal commercial terms negotiated on an arm's length basis by the parties with reference to the prevailing market prices of aluminium profiles and/or panels and at prices and terms (including the payment terms) no more favourable to China Lesso Group members than prices and terms (including the payment terms) of sale of such aluminium profiles and/or panels by Guangdong Xingfa Group to other independent customers.

In determining the actual transaction prices of aluminium profiles and/or panels, the Guangdong Xingfa Group will follow the market practice in the industry to determine the prevailing market price of the aluminium profiles, which is determined with reference to the prevailing price of aluminium ignots, taking into account of the prevailing average price of aluminium ignots as quoted on Guangdong Nanhai Nonferrous Metals Market, and the related processing costs of processing aluminium ignots to the required aluminium profiles and/or panels. When supplying each batch of products to China Lesso Group, China Lesso Group members would need to specify the specifications of the aluminium profiles and/or panels required, as the aluminium profiles and/or panels required by a China Lesso Group member for a particular order may be required for a specified application, and the physical properties such as tensile strength, density, ductility, formability, weldability, and corrosion resistance of the aluminium profiles required will be different from batch to batch.

4

As different aluminium profiles and/or panels will be required by China Lesso Group members from order to order, for the purpose of a master supply agreement, it would not be commercially practicable for Guangdong Xingfa to agree with China Lesso the specific unit price of the aluminium profiles under the Master Supply Agreement A.

Internal Controls

The Group will undertake the following internal control measures to monitor the pricing and terms of the transactions contemplated under the Master Supply Agreement A and ensure that the prices and terms offered by Guangdong Xingfa Group to China Lesso Group will be no more favourable than prices and terms offered to independent customers and that the Annual Cap is not exceeded:

1. monitoring the prevailing average price of aluminium ignots as quoted on Guangdong Nanhai Nonferrous Metals Market on a daily basis;
2. comparing the prices and terms of the supply to China Lesso Group with the prices and terms of aluminium profiles and/or panels supplied by the Group in the PRC as agreed with independent customers on a regular basis;
3. adhering to the relevant internal control policy of the Group on connected transactions in monitoring the prices and terms of supply of aluminium profiles offered by Guangdong Xingfa Group to China Lesso Group to ensure that they shall be no more favourable than those offered by the Group to independent customers;
4. a monthly financial report which contains information on all connected transactions carried out by the Group including the continuing connected transactions under the Master Supply Agreement A will be submitted to the Board;
5. the independent non-executive Directors will review and confirm that the pricing and terms of the transactions contemplated under the Master Supply Agreement A are in the Group's ordinary and usual course of business and are fair and reasonable to the Group and in the interests of the Shareholders and the Group as a whole, on terms no more favourable than prices and terms offered to independent customers on an annual basis; and
6. the auditors of the Company will review the pricing and terms of the transactions contemplated under the Master Supply Agreement A and Annual Cap of such continuing connected transactions in compliance with the annual reporting and review requirements under the Listing Rules on an annual basis.

5