China Binary Sale Technology : DISCLOSEABLE TRANSACTION

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China Binary Sale Technology Limited

神 州 數 字 銷 售 技 術 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8255)

DISCLOSEABLE TRANSACTION

THE ACQUISITION

The Board is pleased to announce that on 12 September 2017 (after trading hours), the Purchaser, a subsidiary of the Company by virtue of a series of structured contracts, and the Vendors entered into the Sale and Purchase Agreement, pursuant to which the Vendors conditionally agreed to sell, and the Purchaser conditionally agreed to acquire the entire equity interest of the Target Companies at the consideration of RMB35,000,000, which shall be settled in cash.

GEM LISTING RULES IMPLICATIONS

As certain applicable percentage ratios for the Acquisition are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 19 of the GEM Listing Rules and is subject to the reporting and announcement requirements but exempt from Shareholders'approval under the GEM Listing Rules.

THE ACQUISITION

The Board is pleased to announce that on 12 September 2017 (after trading hours), the Purchaser, an indirect wholly-owned subsidiary of the Company, and the Vendors entered into the Sale and Purchase Agreement, pursuant to which the Vendors conditionally agreed to sell, and the Purchaser conditionally agreed to acquire the entire equity interest of the Target Companies at an aggregate consideration of RMB35,000,000.

THE SALE AND PURCHASE AGREEMENT

Principal terms of the Sale and Purchase Agreement are as follows:

Date: 12 September 2017

Parties

Vendors: Vendor A, Vendor B, Vendor C, Vendor D and Vendor E

Purchaser: Xinjiang Nine Domain Digital Venture Capital Limited, an indirect wholly-owned subsidiary of the Company

As at the date of this announcement, the Target Companies are beneficially owned as to 100% by Vendors. To the best of the Directors'knowledge, information and belief having made all reasonable enquiries, each of the Vendors is an Independent Third Party.

Subject Matter

Pursuant to the Sale and Purchase Agreement, the Vendors conditionally agreed to sell and the Purchaser conditionally agreed to purchase the entire equity interest in the Target Companies.

Consideration

The aggregate consideration payable by the Purchaser shall be RMB35,000,000, which shall be settled in the following manner:

1. a refundable deposit of RMB3.5 million has been paid by the Purchaser in cash upon entering into the Sale and Purchase Agreement; and

2. RMB31.5 million shall be paid within 3 business days upon the fulfillment of the conditions precedent.

The Consideration was determined after arm's length negotiation between the Purchaser and the Vendors and was determined with reference to, including but not limited to, (i) similar transactions in connection with acquisition of companies with online and offline financing business; and (ii) the prospects of Operating Company in connection with online and/or offline micro-credit business.

The Directors consider that the terms of the Sale and Purchase Agreement are fair and reasonable and on normal commercial terms and that the entering into the Sale and Purchase Agreement is in the interests of the Company and the Shareholders as a whole.

Conditions precedent to the Completion

The completion of the Acquisition is conditional upon fulfilment of, inter alia, the following conditions:

1. the Purchaser being satisfied with the results of the due diligence of the Target Companies (in particular the review on the assets, liabilities, operations and affairs of the Target Companies as considered appropriate by the Purchaser);

2. all necessary consents and approvals (including those from the relevant government, regulatory bodies and authorities and shareholders'approval) in relation to the transactions contemplated under the Sale and Purchase Agreement having been obtained by the parties to the Sale and Purchase Agreement; and

3. there shall not have occurred any material adverse effect or any event, change, effect or development that would, individually or in the aggregate, have had or reasonably be expected to have a material adverse effect on the Target Companies, taken as a whole.

   The Purchaser may in its absolute discretion at any time waive the conditions set out above.

   If the conditions set out above have not been satisfied or waived on or before 180 days immediately after the date of the Sale and Purchase Agreement, the Sale and Purchase Agreement shall cease and determine and thereafter neither party shall have any obligations and liabilities towards each other hereunder save for any antecedent breaches of the terms thereof.

   Completion

   Completion shall take place within 180 days immediately after the date of the Sale and Purchase Agreement.

   Upon completion, the Target Companies will become wholly-owned by the Purchaser, and its financials will be consolidated into the Group.

   INFORMATION ON THE TARGET COMPANIES

   The Target Companies consist of Operating Company, Target Company A, Target Company B and Target Company C.

4. Information of Operating Company

   Operating Company was incorporated in the PRC in May 2012 with a registered capital of RMB350 million, of which RMB100 million has been fully paid up. It is licenced to carry out online and offline micro-credit business, and bills discounting services. As at the date of this announcement, Operating Company is owned as to 30%, 25%, 25% and 20% by Target Company A, Target Company B, Target Company C and Vendor D, respectively.

   Based on the unaudited management accounts of Operating Company prepared in accordance with the PRC GAAP, the financial information of the Operating Company for each of the two years ended 31 December 2015 and 2016 was as follows:

   For the year ended 31 December

   2016 2015

   RMB'000 RMB'000

   (unaudited) (unaudited)

   Revenue nilnil

   Loss before taxation 2291,252

   Loss after taxation 2291,252

   The unaudited net assets value of the Operating Company as at 31 July 2017 was RMB65 million.

5. Information of Target Company A

6. Target Company A was incorporated in the PRC with a registered capital of RMB60 million, of which RMB25 million has been fully paid up. As at the date of this announcement, save for holding of 25% interest in Operating Company, it was dormant and was owned as to 50%, 48.33% and 1.67% by Vendor B, Vendor E and Vendor D, respectively.