Xinhua Winshare Publshng&Med : CONNECTED TRANSACTION -TRANSFER OF 85% EQUITY INTEREST IN THE TARGET COMPANY

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新華文軒出版傳媒股份有限公司

XINHUA WINSHARE PUBLISHING AND MEDIA CO., LTD.

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 811) CONNECTED TRANSACTION TRANSFER OF 85% EQUITY INTEREST IN THE TARGET COMPANY EQUITY TRANSFER AGREEMENT

The Board announces that, on 13 September 2017 (after trading hours), the Company entered into the Equity Transfer Agreement with the Transferee, pursuant to which the Company shall transfer its Target Interest and the Transferee shall accept the Target Interest at a transfer consideration of RMB115,803,300.00. Upon Completion, the Target Company shall cease to be a subsidiary of the Company. Therefore, the financial results of the Target Company will no longer be consolidated in the financial statements of the Company after the Completion Date.

LISTING RULES IMPLICATIONS

As at the date of this announcement, the Transferee is a controlling shareholder (as defined in the Listing Rules) holding 49.11% equity interest in the Company and is therefore a connected person (as defined in the Listing Rules) of the Company. Accordingly, the Equity Transfer under the Equity Transfer Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As certain applicable percentage ratios calculated for the transactions under the Equity Transfer Agreement are higher than 0.1% but less than 5%, the Equity Transfer is only subject to the reporting and announcement requirements and exempt from the approval requirement of the independent shareholders of the Company.

INTRODUCTION

The Board announces that, on 13 September 2017 (after trading hours), the Company entered into the Equity Transfer Agreement with the Transferee, pursuant to which the Company shall transfer its Target Interest and the Transferee shall accept the Target Interest at a transfer consideration of RMB115,803,300.00. Upon Completion, the Target Company shall cease to be a subsidiary of the Company. Therefore, the financial results of the Target Company will no longer be consolidated in the financial statements of the Company after the Completion Date.

EQUITY TRANSFER AGREEMENT

The principal terms of the Equity Transfer Agreement are as follows: Date: 13 September 2017 (after trading hours)

Parties: (i) The Company, as transferor

(ii) Xinhua Publishing Group, as Transferee

As at the date of this announcement, the Transferee is a controlling shareholder (as defined in the Listing Rules) holding 49.11% equity interest in the Company and is therefore a connected person (as defined in the Listing Rules) of the Company.

Assets to be Transferred

According to the Equity Transfer Agreement, the Company shall transfer the Target Interest and the Transferee shall accept the Target Interest.

Consideration for the Transfer

The consideration payable for the transfer of the Target Interest is RMB115,803,300.00, which shall be payable by the Transferee to the Company in cash within 5 working days from the date of signing the Equity Transfer Agreement.

The transfer consideration is determined by the Company and the Transferee after arm's length negotiation and taking into consideration the valuation of the audited book value of shareholders' equity of the Target Company as at 31 October 2016 conducted by Tian Jian Hua Heng, and other factors including the current situation of the Company and the market conditions.

As agreed by the Company and the Transferee, the valuation date of the Target Interest is 31 October 2016. During the period from the valuation date until the date of completion of relevant changes for industrial and commercial registration, the gain or loss and risks attributable to the Target Interest shall be vested to or borne by the Transferee.

VALUATION OF THE TARGET COMPANY

The total shareholders' equity of the Target Company was approximately RMB136,239,200 as at 31 October 2016, the valuation date based on the valuation report dated 27 February 2017 prepared by the Independent Valuer engaged by the Company in relation to the disposal.

The transfer consideration for the Target Interest is RMB115,803,300.00 on the basis of the above valuation results and by reference to various factors such as the current situation of the Company and the market conditions as a whole.

The valuation of the Target Company is deemed to be a profit forecast (the "Profit Forecast") under Rule 14.61 of the Listing Rules as the income approach is used in the Target Company Valuation. Accordingly, both Rules 14.60A and 14.62 of the Listing Rules are applicable.

The details of the basis of the valuation assumptions of the Target Company Valuation are set out as follows:

VALUATION ASSUMPTIONS

1. Pre-assumptions

2. It is assumed that the Target Company will continue operating based on its current operation model.

3. Special assumptions

4. It is assumed that there will be no material changes in the Target Company's current financial policies, pricing policies.

5. It is assumed that the real estate lease will be successfully renewed upon its expiry, and there will be no material changes in rental levels.

6. Unless otherwise stated, it is assumed that the Target Company will fully comply with all relevant laws and regulations, and it is assumed that the management of the Target Company will fulfill their obligations responsibly as the owner of the assets, and will conduct dutiful and effective management for the relevant assets.

7. General assumptions

8. It is assumed that there will be no material changes in the current industrial policies, nor will any new laws and regulations be enacted (regardless of whether it is beneficial or adverse).

9. There will be no material changes in the existing relevant laws and regulations policies and macroeconomic conditions of the country; nor will there be any other material adverse impacts arising from unpredictable and force majeure factors.

10. The Independent Valuer fully understands the current macroeconomic conditions, including the fluctuations in interest rates and exchange rates of RMB, but being limited to its professional level and capabilities, it is unable to predict future trends; therefore the Independent Valuer assumed that there will no material changes in the current level of the interest rates and exchange rates of RMB.

11. In terms of the information provided by the principal and other parties on which the conclusion of the valuation is based, the Independent Valuer assumed that the information is credible and has made necessary confirmations according to the valuation procedure, however, the Independent Valuer gives no assurance as to whether the information is truthful, lawful and complete.

12. It is assumed that all licenses, permits, letters of consent or other legal or administrative authorization documents in respect of the way in which the assets were used that were employed as basis of value estimation issued by the relevant local, national government agencies, private or collective organisations or bodies have been or can be renewed at any time.

The Board discussed with the Independent Valuer about different aspects including the bases and assumptions upon which the Target Company Valuation was prepared, and reviewed the Target Company Valuation for which the Independent Valuer was responsible. The Board also considered the report to the Company from DTT, the auditor of the Company, dated 13 September 2017 regarding whether the discounted future estimated cash flows used in the Target Company Valuation, so far as the calculations are concerned, have been properly compiled, in all material respects, in accordance with the assumptions set out in this announcement (the "DTT Report"). The Board is of the opinion that the Target Company Valuation and the bases and assumptions of the Target Company Valuation, for which the Independent Valuer and the Directors are solely responsible, have been made after due and careful enquiry.

A letter from the Board issued in accordance with Rule 14.62(3) and the DTT Report dated 13 September 2017 issued in accordance with Rule 14.62(2) were delivered to the Stock Exchange. The text of both the letter from the Board and the DTT Report is set out in Appendix I and Appendix II of this announcement, respectively. A letter in relation to report on the Profit Forecast from the Board and a comfort letter from DTT are included in the appendices of this announcement for the purpose of Rules 14.60A and 14.62 of the Listing Rules.

EXPERTS AND CONSENTS

The qualifications of the experts who have given their opinion and advice in this announcement are as follows:

Name Qualifications

Tian Jian Hua Heng an independent professional asset valuer appointed by the Company for the Equity Transfer, which is a firm established upon approval of the Ministry of Finance of the PRC to provide asset valuation services in the PRC

DTT Certified Public Accountants

To the best knowledge, information and belief of the directors having made all reasonable enquiries, the Independent Valuer and DTT are third parties independent of the Group and its connected persons.

As at the date of this announcement, none of the Independent Valuer and DTT has any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

Each of the Independent Valuer and DTT has given and has not withdrawn its consent to the publication of this announcement with the inclusion of its opinion and advice and all references to its name in the form and context in which they are included.

INFORMATION ON THE COMPANY

The Company is principally engaged in the publishing and trading of publications and related products in the PRC.