China All Access : VERY SUBSTANTIAL DISPOSAL IN RELATION TO THE DEEMED DISPOSAL OF INTEREST IN ALL ACCESS GLOBAL LIMITED

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.

中 國 全 通 (控 股) 有 限 公 司

CHINA ALL ACCESS (HOLDINGS) LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 633)

VERY SUBSTANTIAL DISPOSAL

IN RELATION TO

THE DEEMED DISPOSAL OF INTEREST IN

ALL ACCESS GLOBAL LIMITED

THE SUBSCRIPTION AGREEMENT

On 11 February 2020, the Subscriber and AAGL entered into the Subscription Agreement, pursuant to which the Subscriber has conditionally agreed to subscribe for, and AAGL has conditionally agreed to allot and issue, the Subscription Shares (representing approximately 30% of the issued share capital of AAGL as enlarged by the issue of the Subscription Shares) at a consideration in cash of HK$1,000,000,000, upon and subject to the terms and conditions of the Subscription Agreement.

As at the date of this announcement, AAGL is an indirect wholly-owned subsidiary of the Company. AAGL is a limited company incorporated in Hong Kong with issued share capital of HK$10,000 divided into 10,000 shares. Upon Completion, the number of issued shares of AAGL will be increased to 14,286 shares, which will be held as to approximately 70% by the Group and approximately 30% by the Subscriber.

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IMPLICATIONS UNDER THE LISTING RULES

The Subscription constitutes a deemed disposal of the Group's equity interest in AAGL under Rule 14.29 of the Listing Rules and the Deemed Disposal constitutes a very substantial disposal for the Company under the Listing Rules. The Subscription Agreement and the transactions contemplated thereunder are therefore subject to the reporting, announcement and shareholders' approval requirement under the Listing Rules. An EGM will be convened by the Company to consider and, if thought fit, approve the Subscription Agreement and the transactions contemplated thereunder.

GENERAL

A circular containing details of the Subscription Agreement, a notice convening the EGM and other information required under the Listing Rules will be despatched to the Shareholders on or before 29 May 2020 so as to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

On 11 February 2020, the Subscriber and AAGL entered into the Subscription Agreement, pursuant to which the Subscriber has conditionally agreed to subscribe for the Subscription Shares (representing approximately 30% of the issued share capital of AAGL as enlarged by the issue of the Subscription Shares) at a consideration in cash of HK$1,000,000,000. Set out below are the principal terms of the Subscription Agreement.

THE SUBSCRIPTION AGREEMENT

Date

11 February 2020

Parties

1. AAGL, a wholly-owned subsidiary of the Company as at the date of this announcement; and
2. the Subscriber.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Subscriber and its ultimate beneficial owner(s) are Independent Third Parties. The Subscriber is principally engaged in investment holding. It is also the cooperative partner to the strategic cooperation agreement (the

• Strategic Cooperation Agreement") as referred to in the announcement of the Company dated 16 October 2019, pursuant to which the Subscriber had agreed to provide funding of US$500 million to support development of the Group's projects

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in, among other aspects, new energy solutions, LCD display solutions, plastic injection molding solutions and investment projects which mainly focus in the application of 5G technology in the fields of medicine and education, whereas the Company will be responsible for the development of the projects for a period of ten years from the date of the strategic cooperation agreement (the "Investment Period"). To implement such strategic cooperation plan, the Subscriber entered into the (i) Shenzhen Lead Capital Investment Agreement; (ii) SETD Subscription Agreement; and (iii) Subscription Agreement with the Group. The Shenzhen Lead Capital Injection, the SETD Subscription and the Subscription are not inter-conditional upon each other. As at the date of this announcement, the Shenzhen Lead Capital Injection and the SETD Subscription have not been completed. The Subscription will not lead to any change in board composition in the Company and/or AAGL.

As at the Latest Practicable Date, the Company has not entered into other agreements with the Subscriber in relation to the future development or corporate management of AAGL.

As at the Latest Practicable Date, save as the Shenzhen Lead Capital Injection, the SETD Subscription and the Subscription, the Group and the Subscriber have not agreed and are not currently in any discussions, negotiations or understandings on the use of the remaining funding balance under the Strategic Cooperation Agreement. The Subscriber will from time to time during the Investment Period assess the investment opportunities in the Group on a project by project basis.

The ultimate beneficial owner of the Subscriber is Mr. Wang Zhenyu ("Mr. Wang"), who is an individual investor in the PRC. Mr. Wang, as the representative of the Subscriber, was introduced to Mr. Tam Sui Kwan, the independent non-executive Director, and Mr. Shao Kwok Keung, the executive Director, through a friend of Mr. Tam Sui Kwan in September 2019, when Mr. Wang first learnt about the investment opportunity in the Group and was interested in investing in the Group and its projects.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, save for the Strategic Cooperation Agreement. Shenzhen Lead Capital Injection and SETD Subscription, the Subscriber and/or Mr. Wang does not have any current or historical relationships, agreements, understandings, arrangements and otherwise with the following persons:

1. the Company and its connected persons;
2. the counterparties of the Company's previous transactions (including but not limited to the various subscribers as mentioned in the announcements of the Company dated 30 May 2019, 11 July 2019 and 25 October 2019);

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1. Prosper Talent Limited, the plaintiff as mentioned in the announcement of the Company dated 1 July 2019; and
2. Ease Wellness International Group Limited, which was mentioned in the announcement of the Company dated 25 October 2019.

Subject matter

Pursuant to the Subscription Agreement, the Subscriber has conditionally agreed to subscribe for the Subscription Shares (representing approximately 30% of the issued share capital of AAGL as enlarged by the issue of the Subscription Shares).

Consideration

The consideration for the Subscription Shares shall be HK$1,000,000,000. The Subscriber will settle the consideration in cash upon Completion. The consideration was determined after arm's length negotiations between parties to the Subscription Agreement on normal commercial terms with reference to the net asset value of AAGL Group of approximately RMB1,937.24 million (representing approximately HK$2,194.41 million) as at 30 June 2019.

Conditions Precedent

Completion is conditional upon fulfilment or, as the case may be, waiver of the following conditions:

1. the Subscriber having completed its due diligence in relation to AAGL;
2. the passing of the requisite resolutions of the Shareholders at an extraordinary general meeting of the Company approving the Subscription Agreement and the transactions contemplated thereunder, and all other requisite approval and permit procedures having been completed; and
3. the warranties given by AAGL in the Subscription Agreement remaining true and accurate in all material respects.

The Subscriber has absolute discretion to waive conditions (a) and (c) above whilst condition (b) is incapable of being waived.

If any of the conditions above is not satisfied or waived within 6 months after the date of the Subscription Agreement (or such other date as AAGL and the Subscriber may agree in writing), the Subscription Agreement shall lapse and there shall be no further liability on the parties (save in respect of any antecedent breach).

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Completion

Completion shall take place on the tenth day following the fulfilment or waiver (as the case may be) of the conditions precedent in accordance with the terms of the Subscription Agreement.

INFORMATION ON AAGL GROUP

As at the date of this announcement, the Company indirectly holds the entire issued share capital in AAGL. AAGL is a company incorporated in Hong Kong with limited liability with issued share capital of HK$10,000 divided into 10,000 shares. Upon Completion, the number of issued shares of AAGL will be increased to 14,286 shares, which will be held as to approximately 70% by the Group and approximately 30% by the Subscriber.

AAGL Group is principally engaged in the development of telecommunications solution provision business.

According to the unaudited financial statements of AAGL Group which was prepared under the generally accepted accounting principles in Hong Kong, AAGL Group's net asset value amounted to approximately RMB1,937.24 million (representing approximately HK$2,194.41 million) as at 30 June 2019. Set out below is the unaudited financial information of AAGL Group for each of the years ended 31 December 2017 and 2018:

	For the year ended
	31 December
	2017	2018
	RMB'000	RMB'000
Revenue	317,782	67,651
Net profit/(loss) before taxation	853,317	(115,116)
Net profit/(loss) after taxation	850,346	(114,420)

The significant decrease in AAGL Group's revenue from approximately RMB317.8 million for the year ended 31 December 2017 to approximately RMB67.7 million for the year ended 31 December 2018, representing a decrease of approximately 78.7%, was mainly due to the challenges of lowering leverage ratio, eliminating excess production capacity and the lower market demand of the Group's solutions as a result of the Sino-US trade war. In light of the economic woes, the Group strove for new customers and orders which, however, reduced AAGL Group's profit margin. As a result, AAGL Group recorded net loss for the year ended 31 December 2018.

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FINANCIAL EFFECT OF THE SUBSCRIPTION

Upon Completion, the Company's interest in AAGL will be reduced from 100% to approximately 70%, resulting in a deemed disposal of approximately 30% interest in AAGL Group by the Company. AAGL will remain a subsidiary of the Company, and its results, assets and liabilities will continue to be consolidated into the consolidated financial statements of the Company. Given the Deemed Disposal does not result in a change of control, it will not recognise any gain or loss in the Company's income statement. After taking into account the unaudited consolidated net asset value of AAGL Group as at 30 June 2019 which amounted to approximately RMB1,937.24 million (representing approximately HK$2,194.41 million), and subject to changes, events and the provisions to be made, if any, subsequent to 30 June 2019, the Deemed Disposal as a result of the Subscription is estimated to have a surplus of approximately HK$5.70 million to be recognised in equity and attributed to the owners of the Company in the Company's consolidated financial statements prepared under HKFRS for the corresponding financial period.

PROPOSED USE OF PROCEEDS

The net proceeds from the Subscription is estimated to be approximately HK$948.60 million. Pursuant to the Subscription Agreement, such net proceeds shall be applied to AAGL Group to develop its telecommunications solution provision business, especially in the aspect of 5G technology which is being launched massively in different parts of the world.

REASONS FOR AND BENEFITS OF ENTERING INTO THE SUBSCRIPTION AGREEMENT

The Group is a leading ICT solution provider, which focuses on the new ICT research and development and high-end manufacturing, whilst spearheading into three different business segments, namely ICT, new energy and investment activities.

The Board considers that entering into the Subscription Agreement to be an important and efficient source of capital to grow the Group's ICT segment in the aspects of telecommunications asset management, vertical market exploitation, sales of terminals and equipment, provision of network management service and technology development and support for application and system development. On 15 August 2019, the Group entered into a framework agreement with Aries Telecom Plc in relation to, among others, engineering procurement construction of 5G network in Malaysia. The Group anticipates there would be tremendous opportunities upcoming whilst there is worldwide deployment of 5G technology. Accordingly, the Directors (including the independent non-executive Directors) consider that the terms of the Subscription Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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IMPLICATIONS UNDER THE LISTING RULES

The Subscription constitutes a deemed disposal of the Group's equity interest in AAGL under Rule 14.29 of the Listing Rules and the Deemed Disposal constitutes a very substantial disposal for the Company under the Listing Rules. The Subscription Agreement and the transactions contemplated thereunder are therefore subject to the reporting, announcement and shareholders' approval requirement under the Listing Rules. An EGM will be convened by the Company to consider and, if thought fit, approve the Subscription Agreement and the transactions contemplated thereunder.

GENERAL

A circular containing details of the Subscription Agreement, a notice convening the EGM and other information required under the Listing Rules will be despatched to the Shareholders on or before 29 May 2020 so as to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

As the Subscription is conditional upon fulfilment of certain conditions, the Subscription may or may not proceed. Shareholders and potential investors are advised to exercise caution in dealing in the Shares.

DEFINITIONS

Unless otherwise specified, the following terms have the following meanings in this announcement:

"AAGL"	All Access Global Limited, a company
	incorporated in Hong Kong and an indirect
	wholly-owned subsidiary of the Company as at the
	date of this announcement
"AAGL Group"	AAGL and its subsidiaries
"Board"	the board of Directors
"Business Day(s)"	day(s) (excluding Saturday, Sunday or other
	statutory holidays) on which banks in Hong Kong
	and the PRC are open for general business

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"Company"	China All Access (Holdings) Limited, a company
	incorporated in the Cayman Islands with limited
	liability, the issued shares of which are listed and
	traded on the Main Board of the Stock Exchange
"Completion"	the completion of the Subscription in accordance
	with the terms and conditions of the Subscription
	Agreement
"connected person(s)"	has the meaning as ascribed to it in the Listing
	Rules
"Deemed Disposal"	the deemed disposal of the Company's interest in
	AAGL Group as a result of the Subscription
"Director(s)"	the director(s) of the Company
"EGM"	the extraordinary general meeting to be convened
	and held by the Company for the Shareholders to
	consider and, if thought fit, approve the
	Subscription Agreement and the transactions
	contemplated thereunder
"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
"ICT"	information and communication technology
"Independent Third	third party(ies) independent of the Company and its
Party(ies)"	connected persons
"Listing Rules"	the Rules Governing the Listing of Securities on
	the Stock Exchange
"PRC"	the People's Republic of China, which, for the
	purpose of this announcement, excluding Hong
	Kong, the Macau Special Administrative Region
	and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC

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"SETD Subscription"	the proposed subscription by the Subscriber of
	4,286 shares in the share capital of China All
	Access Science And Engineering Technology
	Development Limited to be subscribed by the
	Subscriber pursuant to the terms and conditions of
	the SETD Subscription Agreement as referred to in
	the announcement of the Company dated 3 January
	2020
"SETD Subscription	the subscription agreement dated 2 January 2020
Agreement"	entered into by the Subscriber and China All
	Access Science And Engineering Technology
	Development Limited in relation to the SETD
	Subscription
"Share(s)"	ordinary share(s) of HK$0.01 each in the issued
	share capital of the Company
"Shareholder(s)"	holder(s) of the Share(s)
"Shenzhen Lead Capital	the proposed subscription for approximately 30%
Injection"	of the enlarged registered capital of Shenzhen Lead
	Communications Limited* (深圳市立德通訊器材
	有限公司) by way of capital contribution in cash
	pursuant to the Shenzhen Lead Capital Investment
	Agreement as referred to in the announcement of
	the Company dated 26 November 2019
"Shenzhen Lead Capital	the conditional capital investment agreement dated
Investment Agreement"	26 November 2019 entered into between Lide
	Gobal Limited and the Subscriber in relation to,
	amongst other things, the Shenzhen Lead Capital
	Injection
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subscriber"	CRC-YJ INDUSTRY LIMITED (中鐵友嘉實業有
	限公司), a company incorporated in Hong Kong
	with limited liability
"Subscription"	the subscription by the Subscriber of the
	Subscription Shares pursuant to the Subscription
	Agreement

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"Subscription Agreement"	the conditional subscription agreement dated 11
	February 2020 entered into between AAGL and the
	Subscriber in relation to, amongst other things, the
	Subscription
"Subscription Price"	the consideration for the Subscription, being
	HK$1,000,000,000
"Subscription Shares"	4,286 shares in the share capital of AAGL to be
	subscribed by the Subscriber pursuant to the terms
	and conditions of the Subscription Agreement
"%"	per cent.

For illustration purpose only, sums in HK$ and RMB in this announcement are translated at the exchange rate of HK$1 = RMB0.88281. No representation is made that any amount in the respective currencies could have been converted at that rate or any other rates.

By order of the Board

China All Access (Holdings) Limited

Shao Kwok Keung

Chief Executive Officer

Hong Kong, 11 February 2020

As at the date of this announcement, the executive Directors are Mr. Chan Yuen Ming and Mr. Shao Kwok Keung; the non-executive Director is Mr. Bao Tiejun; and the independent non-executive Directors are Mr. Wong Che Man Eddy, Mr. Lam Kin Hung Patrick and Mr. Tam Sui Kwan.

* for identification purposes only

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