PYI : VERY SUBSTANTIAL DISPOSAL AND RESUMPTION OF TRADING

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.

PYI Corporation Limited

(Incorporated in Bermuda with limited liability)

(Stock code: 498)

VERY SUBSTANTIAL DISPOSAL

AND RESUMPTION OF TRADING

Financial Adviser to the Company

THE DISPOSALS

The Board is pleased to announce that on 16 December 2019:

1. Jiaxing Feeder, an indirect wholly-owned subsidiary of PYI, as the vendor entered into a conditional agreement with 浙江海港內河港口發展有限公司 (Zhejiang Seaport Inland River Port Development Company Limited*), as the purchaser for the disposal of 90% equity interest in Jiaxing Port for a consideration of approximately RMB373 million (equivalent to HK$414 million), subject to Adjustment A; and
2. PYI Nantong, an indirect wholly-owned subsidiary of PYI, as the vendor entered into a conditional agreement with Ming Cheng International Company Limited, as the purchaser for the disposal of 100% equity interest in Paul Y. Corp, which holds a 40% equity interest in Jiangyin Port for a consideration of approximately RMB286 million (equivalent to HK$318 million), subject to Adjustment B,

and PYI having joined in to execute each of the above agreements as guarantor for the relevant Vendor.

The Disposals are inter-conditional with each other.

Upon completion of the Disposals, PYI Group will cease to hold any interest in Jiaxing Port, Paul Y. Corp and Jiangyin Port.

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IMPLICATIONS UNDER THE LISTING RULES

As one of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Disposals, when aggregated as the Agreements were made with the Purchasers whose ultimate controlling shareholder is 浙江省海港投資運營集團有限公

司 (Zhejiang Seaport Investment and Operation Group Co., Ltd.*), exceeds 75%, the Disposals constitute very substantial disposals for the Company pursuant to Rule 14.06(4) of the Listing Rules and are therefore subject to the notification, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

A circular containing, among other things, (i) further information relating to the Disposals; (ii) a notice convening the SGM; and (iii) other information as required to be disclosed under the Listing Rules, will be despatched to the Shareholders on or before 15 January 2020, as the Company expects that it will require more time to collate the financial information to be included in the circular.

Completion of the Disposals is subject to fulfilment of various conditions precedent as set out under the paragraph headed ''Conditions Precedent'' in this announcement including, among others, the approval of the Disposals by the Shareholders at the SGM and applicable PRC authorities. Accordingly, the Disposals may or may not proceed. Shareholders and potential investors are therefore advised to exercise caution when dealing in the securities of the Company.

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 10:56 a.m. on 16 December 2019 pending the publication of this announcement. The Company has applied to the Stock Exchange for the resumption of trading in the Shares with effect from 1:00 p.m. on 16 December 2019.

THE DISPOSALS

The Board is pleased to announce that on 16 December 2019, the Company and each of the Vendors entered into the Agreements, material terms of which are set out below.

AGREEMENT A
Date	:	16 December 2019
Vendor	:	Jiaxing Feeder Port Investment Limited, an indirect wholly-
		owned subsidiary of the Company
Guarantor	:	the Company as the guarantor for Jiaxing Feeder
Purchaser	:	浙江海港內河港口發展有限公司 (Zhejiang Seaport Inland River
		Port Development Company Limited*)

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As at the date of this announcement, Purchaser A does not hold any equity interest in Jiaxing Port.

Assets to be disposed of

Pursuant to Agreement A, Jiaxing Feeder has conditionally agreed to sell, and Purchaser A has conditionally agreed to purchase, Disposal Equity A, being the 90% equity interest in Jiaxing Port and being all the equity interest in Jiaxing Port held by Jiaxing Feeder as at the date of this announcement.

Basis of Consideration and Adjustment

The initial consideration payable by Purchaser A to Jiaxing Feeder for Disposal Equity A is approximately RMB373 million (equivalent to HK$414 million), subject to adjustment, if any, as set out in the paragraph headed ''Adjustment A'' below.

Consideration A was determined based on arm's length negotiation between the Company, Jiaxing Feeder and Purchaser A with reference to (i) the appraised value of Jiaxing Port as at the benchmark date of 31 August 2019 by the Approved Valuer; and

1. the valuation of Jiaxing Port undertaken by an independent business appraiser in Hong Kong engaged by the Company.

Adjustment A

Adjustment A represents 90% of the change in audited net asset value (the ''Net Asset Change'') of Jiaxing Port between 31 August 2019 and the Completion Date A (the ''Interim Period A'') as disclosed in the audited consolidated accounts of Jiaxing Port for the Interim Period A (''Completion Accounts A'') (which should be available within 45 days of the Completion Date A) to be prepared in accordance with the PRC GAAP.

For the avoidance of doubt, if the Net Asset Change of Jiaxing Port is a reduction of the value, Adjustment A will reduce the final Consideration A to be paid by Purchaser A accordingly by the above adjustment.

Payment of Consideration A

Consideration A shall be settled by Purchaser A in cash (in RMB or an equivalent amount in HK$) in the following manner:

1. 35% of the net amount of (i) Consideration A less (ii) the estimated PRC enterprise income tax payable by Jiaxing Feeder on the disposal of Disposal Equity A (the ''Net Consideration A''), shall be paid within 7 Business Days upon fulfilment of the Initial Conditions Precedent A;
2. 50% of the Net Consideration A shall be paid within 7 Business Days after Completion Date A; and
3. the balance in aggregate of (i) 15% of the Net Consideration A; and (ii) Adjustment A, as adjusted for the actual amount of PRC enterprise income tax payable by Jiaxing Feeder on the disposal of Disposal Equity A, shall be paid within 7 Business Days after the issue of Completion Accounts A.

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Completion

Agreement A provides that subject to fulfillment (or waiver, as the case may be) of Conditions Precedent A, Disposal A shall be completed (including completion of registration of change in relation to the transfer of Disposal Equity A) within the Completion Period provided that Purchaser A may serve a written notice no later than 10 Business Days before the expiry of the Completion Period to extend it for 30 days (the ''Latest Completion Date'').

AGREEMENT B
Date	:	16 December 2019
Vendor	:	PYI Nantong Port Limited, an indirect wholly-owned subsidiary of
		the Company
Guarantor	:	the Company as the guarantor for PYI Nantong
Purchaser	:	Ming Cheng International Company Limited

As at the date of this announcement, Purchaser B does not hold any equity interest in Paul Y. Corp.

Assets to be disposed of

Pursuant to Agreement B, PYI Nantong has conditionally agreed to sell, and Purchaser B has conditionally agreed to purchase, Disposal Equity B, being all the issued shares of Paul Y. Corp.

Basis of Consideration and Adjustment

The initial consideration payable by Purchaser B to PYI Nantong for Disposal Equity B is approximately RMB286 million (equivalent to HK$318 million), subject to adjustment, if any, as set out in the paragraph headed ''Adjustment B'' below.

Consideration B was determined based on arm's length negotiation between the Company, PYI Nantong and Purchaser B with reference to (i) the appraised values of Paul Y. Corp and Jiangyin Port as at the benchmark date of 31 August 2019 by the Approved Valuer; and (ii) the valuation of Paul Y. Corp undertaken by an independent business appraiser in Hong Kong engaged by the Company.

Adjustment B

Adjustment B represents the audited Net Asset Change of Paul Y. Corp (incorporated with 40% of the audited Net Asset Change of Jiangyin Port) between 31 August 2019 and the Completion Date B (the ''Interim Period B'') as disclosed in the audited accounts of Paul Y. Corp for the Interim Period B (''Completion Accounts B'') (which should be available within 45 days of the Completion Date B) to be prepared in accordance with HK GAAP for Paul Y. Corp and the PRC GAAP for Jiangyin Port.

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For the avoidance of doubt, if the Net Asset Change of Paul Y. Corp is a reduction of the value, Adjustment B will reduce the final Consideration B to be paid by Purchaser B accordingly by the above adjustment.

Payment of Consideration B

Consideration B shall be settled by Purchaser B in cash (in RMB or an equivalent amount in HK$) in the following manner:

1. 35% of Consideration B shall be paid within 7 Business Days upon fulfilment of the Initial Conditions Precedent B;
2. 50% of Consideration B shall be paid within 7 Business Days after Completion Date B and upon PYI Nantong having provided to Purchaser B evidence that PYI Nantong has paid the PRC enterprise income tax payable on the disposal of Disposal Equity B; and
3. the balance in aggregate of (i) 15% of Consideration B; and (ii) Adjustment B, shall be paid within 7 Business Days after the issue of Completion Accounts B, subject to PYI Nantong having paid the PRC enterprise income tax payable on the disposal of Disposal Equity B.

Completion

Agreement B provides that subject to fulfillment (or waiver, as the case may be) of the Conditions Precedent B, Disposal B shall be completed upon the signing of instrument of transfer and bought and sold notes in relation to the transfer of Disposal Equity B within the Completion Period provided that Purchaser B may serve a written notice no later than 10 Business Days before the expiry of the Completion Period to extend it to the Latest Completion Date.

CONDITIONS PRECEDENT

Each Agreement provides that completion of the Disposal thereunder is conditional upon fulfilment of the following conditions precedent:

1. the parties to such Agreement having obtained all necessary approvals and consents in relation to the execution and performance of such Agreement required under or by the applicable laws, their respective constitutional documents, government authorities, the Listing Rules and agreements with third parties entered into pursuant to the provisions of such Agreement, including but not limited to:
2. 1. the Purchaser and the Vendor have signed the other Agreement and confirm that each of the Agreements are inter-conditional with each other, and in the case of Agreement B, all the conditions precedent of Agreement A have been fulfilled;
   2. compliance by the Company with all the relevant requirements under the Listing Rules, including obtaining approval from the Shareholders;

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1. 1. if applicable, the approval from the relevant authorities for the Disposal having been obtained and will not result in such Agreement being terminated or declared void; and
   2. the Purchaser having completed its internal approval procedures.
2. the warranties given by the Purchaser are true, accurate and complete in all material respects;
3. the warranties given by the Vendor are true, accurate and complete in all material respects;
4. there is no material breach by the Vendor of any of its obligations under such Agreement in respect of the interim operation of the Disposal Company between the date of such Agreement and the Completion Date;
5. the Disposal Company (and its subsidiaries, if any) having obtained written waiver(s) from the banks in relation to the Disposal vis-a-vis their bank borrowings and guarantee obligations;
6. all encumbrances on the Disposal Equity (other than security for bank borrowings as disclosed) and the port project of the Disposal Group have been released and the Disposal Equity and the port project of the Disposal Group are free from encumbrances;
7. all litigations and proceedings as disclosed by the Vendor under such Agreement having been completed satisfactorily and there are no outstanding disputes;
8. the Purchaser having paid in full the first instalment payment of the Consideration;
9. all debts of the Disposal Company (including Jiangyin Port in the case of Agreement B) with related parties having been fully settled;
10. there are no applicable laws or government authorities prohibiting the Disposal; and
11. save for matters disclosed, no Material Adverse Effect having occurred, where Material Adverse Effect means, for Agreement A any of the items (i) to (vi) below and for Agreement B any of the items (i) to (vii) below:
12. 1. in respect of the Disposal Equity, any company within the Disposal Group, any equity interest/shareholding of any company within the Disposal Group and/or the port project of the Disposal Group where the ownership: (a) is being under dispute; (b) is subject to encumbrances or asset defects other than those disclosed; or (c) is subject to distress, injunction or other forms of judicial preservation restrictions;

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1. the required procedures and government approval documents required for the acquisition, construction and operation of the port project by the Disposal Group being incomplete (under Agreement B, revoked or declared void), or any of the documents being fraudulent, and the Vendor being unable to remedy the same (other than those matters disclosed);
2. the land, property, port, shoreline, facilities and equipment, other construction items comprised in the port project of the Disposal Group having material quality issues or other defects resulting in failure in inspection or delivery for use (other than those disclosed);
3. the Disposal Company or any of its subsidiaries being in receivership or liquidation, or having applied for winding-up or liquidation;
4. event(s) resulting in loss to the Disposal Company or any of its subsidiaries or the port project of the Disposal Group of more than RMB5 million in aggregate;
5. the documents or information provided by the Vendor in relation to the Disposal Company or any of its subsidiaries or the port project, its assets or otherwise in relation to the Disposal being false or fabricated; and
6. in respect of the assets transfer agreement dated 25 June 2010, as supplemented by the supplemental agreement dated 30 June 2010, entered into between Jiangyin Port and 江陰臨港新城開發建設有限公司 (Jiangyin New City Port Development and Construction Company Limited*) (collectively the ''Asset Transfer Agreement'') and the disclosure in relation thereto under Agreement B, any adverse event arising from such disclosure, or matters which has not been specifically disclosed, or which Purchaser B has not specifically accepted, or which is beyond the reasonable anticipation of Purchaser B (being to maintain the existing operation of the port project and be entitled to its revenue, or to terminate the Asset Transfer Agreement and enter into a new asset transfer agreement or new rental agreement for operation premises, such that Jiangyin Port has the legal right to operate the port project for more than 15 years), where such adverse event is directly caused by Paul Y. Corp or the Company or the Asset Transfer Agreement.

Under each Agreement:

1. the Vendor may waive the respective conditions (b) and (h) above in writing;
2. the Purchaser may waive the respective conditions (c), (d), (e), (f), (g) and (i) above in writing;
3. if condition (k) cannot be fulfilled due to the Vendor, the Purchaser may waive such condition in writing;
4. if condition (k) cannot be fulfilled other than due to the Vendor, such condition can only be waived by the Vendor and the Purchaser jointly in writing; and

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1. condition (j) can only be waived by the Vendor and the Purchaser jointly in writing. Agreement A and Agreement B are inter-conditional with each other.

ADDITIONAL INITIAL CONDITIONS PRECEDENT OF AGREEMENT A

Agreement A also provides that completion of Disposal A is conditional upon the following additional conditions precedent:

1. Jiaxing Feeder having obtained consent(s) from the remaining shareholder of Jiaxing Port and its agreement to waive its first right to purchase Disposal Equity A, and having obtained the approval of or filed documents with the relevant authority in relation to Disposal A;
2. the approval from the board of directors of Jiaxing Port on Disposal A;
3. Purchaser A having completed all foreign exchange related approval procedures; and
4. Jiaxing Port has completed the registration of its latest list of directors and supervisors with the relevant PRC authorities.

Purchaser A may waive condition (iv) above in writing.

BREACH AND TERMINATION

Each Agreement provides that:

1. each party shall procure the fulfilment of their respective conditions precedent within three (3) months of the signing of the Agreement;
2. if (i) by reason of any party the conditions precedent cannot be fulfilled within three
3. 1. months from the signing of the Agreement; or (ii) when all the conditions precedent have been fulfilled (or waived, as the case may be) but a party fails to comply with its obligation in relation to completion or completion is practically impossible by the Latest Completion Date, the party not in default can either:

1. postpone the completion. In such case, the non-defaulting party shall be entitled to require the defaulting party to pay compensation to it at an amount equivalent to 0.05% of the first instalment payment of the Consideration for each day of the delay caused by the defaulting party, other than delay caused by the Initial Conditions Precedent A or the Initial Conditions Precedent B (as the case may be); or
2. terminate such Agreement, whereupon the Vendor shall return to the Purchaser within 5 Business Days of termination all amounts paid by the Purchaser and (i) if the termination notice is issued by the Purchaser, the Vendor shall at the same time pay to the Purchaser a compensation amount of RMB10 million; or (ii) if the termination notice is issued by the Vendor, the

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Purchaser shall pay a compensation amount of RMB10 million to the Vendor, in each case without prejudice to the right of the non-defaulting party to claim damages over and above the said compensation amount;

1. such Agreement may be terminated if between the signing of such Agreement and completion, there is a change in the applicable laws or due to action of government authorities or internal approval not having been obtained or any of the Initial Conditions Precedent A or the Initial Conditions Precedent B (as the case may be) not having been satisfied, directly resulting in a party not being able to perform its obligations under such Agreement in full. In such case, the Vendor shall refund to the Purchaser within 7 Business Days of termination all amounts paid by the Purchaser but neither party is liable for breach; and
2. if the Purchaser shall, other than due to regulatory reasons, fail to pay any part of the Consideration and still fails to pay the same within 10 Business Days of written demand by the Vendor, the Vendor shall be entitled to terminate such Agreement and the Purchaser shall pay compensation at the rate of 0.05% of the amount in arrears per day during the period of delay. The Purchaser shall co-operate with the Vendor to transfer the Disposal Equity within 10 days of the termination.

Agreement B also provides that if Agreement A is terminated pursuant to the provisions thereunder or due to applicable laws and regulations after the completion of Disposal A, provided that neither parties is in breach under Agreement B, Agreement B may be terminated and PYI Nantong should return in full the payment it received to Purchaser B not later than 7 Business Days from the termination of Agreement B and neither party is liable for breach.

FURTHER ASSURANCE UNDER AGREEMENT B

Agreement B further provides that, where within three (3) years from the date of Agreement B, PYI Nantong is in material breach of Agreement B or if Material Adverse Effect under Agreement B has occurred, Purchaser B has the right to require PYI Nantong to remedy such breach and/or remove such Material Adverse Effect, regardless whether Disposal B has been completed. If PYI Nantong shall fail to do so within ten (10) Business Days from the written request of Purchaser B, Purchaser B has the right to terminate Agreement B and require PYI Nantong to return to Purchaser B all amounts paid by Purchaser B together with a compensation amount of RMB10 million but without prejudice to Purchaser B's right to claim against PYI Nantong for further damages. Purchaser B shall transfer Disposal Equity B back to PYI Nantong within one

(1) month from such termination of Agreement B.

The Directors are of the view that since some of the events stated under the Material Adverse Effect relate to the fundamental elements of Disposal B, including the ownership and legality of Disposal Equity B and of the assets, business and/or operations of Paul Y. Corp and its operating subsidiaries, the aforesaid provision in Agreement B, in the context of the Disposals, is fair and reasonable, and in the interests of the Company and its Shareholders.

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INFORMATION OF DISPOSAL COMPANIES

1. Jiaxing Port
   Jiaxing Port is a 90%-owned subsidiary of the Company and a sino-foreign joint venture enterprise established in the PRC with limited liability. It operates the Jiaxing International Feeder Port, which is situated at Nanhu District of Jiaxing City and occupies a shoreline of 570 metres and a land mass of 326,000 square metres. Jiaxing Port is principally engaged in loading, discharging and storage of containers. It also features a range of integrated logistics supporting services such as examination, quarantine, storage and information services.
   Jiaxing Port's container throughput reached 156,000 TEUs for the year ended 31 March 2019 and 186,000 TEUs for the year ended 31 March 2018. For the six months ended 30 September 2019, container throughput increased by 13% to about 90,000 TEUs from 80,000 TEUs for the six months ended 30 September 2018.
2. Paul Y. Corp
   Paul Y. Corp is an indirect wholly-owned subsidiary of the Company incorporated in Hong Kong and its principal asset is a 40% equity interest in Jiangyin Port, which is a sino-foreign joint venture enterprise established in the PRC with limited liability that operates the Jiangyin Sunan Container Terminal. Jiangyin Port is principally engaged in containers loading and discharging as well as storage, maintenance, washing and leasing of containers. Jiangyin Sunan Container Terminal is situated at New Harbour District of New Harbour City in Jiangyin City and occupies a land area of 0.49 square kilometres, shorelines of 589 metres long at outer port and 1,090 metres long at inner port. Jiangyin Port's container throughput reached 574,000 TEUs for the year ended 31 December 2018 and 541,000 TEUs for the year ended 31 December 2017. For the six months ended 30 June 2019, container throughput slightly decreased by 1% to about 268,000 TEUs from 272,000 TEUs for the six months ended 30 June 2018.

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FINANCIAL SUMMARY OF DISPOSAL COMPANIES

1. Jiaxing Port
   Set out below is the financial information of Jiaxing Port as extracted from its unaudited financial statements prepared in accordance with the HK GAAP for the two years ended 31 March 2019 and six months ended 30 September 2019:

			For the
			six months
	For the year ended	ended
	31 March	30 September
	2018	2019	2019
	RMB'million	RMB'million	RMB'million
Profit/(loss) before taxation	(1)	(1)	0.3
Profit/(loss) after taxation	(1)	(1)	0.3
			As at
	As at 31 March	30 September
	2018	2019	2019
	RMB'million	RMB'million	RMB'million
Net assets	255	254	254

1. Paul Y. Corp
   Set out below is the financial information of Paul Y. Corp as extracted from its unaudited financial statements prepared in accordance with the HK GAAP for the two years ended 31 March 2019 and six months ended 30 September 2019:

			For the
			six months
	For the year ended	ended
	31 March	30 September
	2018	2019	2019
	HK$'million	HK$'million	HK$'million
Profit before taxation	892	13	27
Profit after taxation	737	13	26
			As at 30
	As at 31 March	September
	2018	2019	2019
	HK$'million	HK$'million	HK$'million
Net assets	227	226	238

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The significant profit before taxation and profit after taxation recorded for the year ended 31 March 2018 was primarily attributable to the gain on disposal of its interest in Nantong Port Group Limited.

INFORMATION OF PYI GROUP

The Company is an investment holding company. PYI Group is principally involved in ports and infrastructure development and investment, and the operation of ports and logistics facilities, in the Yangtze River region of China. PYI Group is also engaged in land and property development and investment in association with ports and infrastructure development, as well as securities trading and investment, and provision of loan financing activities. In addition, PYI Group provides comprehensive engineering and property-related services through Paul Y. Engineering Group Limited, an associate company which the Company indirectly owns 48.23% equity interest.

INFORMATION OF THE PURCHASERS

Purchaser A is a company incorporated under the laws of the PRC with limited liability and is principally engaged in investment, asset management, port operations, logistics and real estate development. It is a wholly-owned subsidiary of 浙江省海港投資運營集團 有限公司 (Zhejiang Seaport Investment and Operation Group Co., Ltd.*), which in turn is indirectly held by 寧波市人民政府國有資產監督管理委員會 (State-owned Assets Supervision and Administration Commission of the People's Government of Ningbo City*) and 浙江省人民政府國有資產監督管理委員會 (State-owned Assets Supervision and Administration Commission of the People's Government of Zhejiang Province*), owning approximately 60.84% and 27.59% of the equity interest of 浙江省海港投資運營 集團有限公司 (Zhejiang Seaport Investment and Operation Group Co., Ltd.*) respectively.

Purchaser B is a company incorporated under the laws of Hong Kong with limited liability. It is principally engaged in investment and is a wholly-owned subsidiary of Ningbo Port.

Ningbo Port is a state-owned enterprise and the issued shares of which are listed on the Shanghai Stock Exchange (stock code: 601018). It is principally engaged in providing port operation management service, including loading and unloading of containers, iron ore, crude oil, coal cargo, liquefied products, groceries and other cargo handling operations as well as comprehensive services related to port production, such as tugboat assistance, terminal leasing, ship agency and logistics for Ningbo Zhoushan Port, Wenzhou Port, Jiaxing Port, Taizhou Port and Yiwu Port in the PRC.

According to publicly available information:

1. Ningbo Port has a market capitalisation of approximately RMB48.7 billion as at 13 December 2019, with revenue and net profit for the year ended 31 December 2018 of approximately RMB21.9 billion and RMB3.2 billion, respectively;

1. 寧波舟山港集團有限公司 (Ningbo Zhoushan Port (Group) Co., Ltd.*) is the controlling shareholder of Ningbo Port, holding approximately 76.31% of its total issued shares;

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1. other major shareholders of Ningbo Port include 招商局國際碼頭(寧波)有限公司 (China Merchants International Terminals (Ningbo) Limited*) and 中國證券金融股份 有限公司 (China Securities Finance Co., Ltd.*), holding approximately 3.09% and 2.99% of the total issued shares of Ningbo Port respectively; and
2. the sole shareholder of 寧波舟山港集團有限公司 (Ningbo Zhoushan Port (Group) Co., Ltd.*) is 浙江省海港投資運營集團有限公司 (Zhejiang Seaport Investment and Operation Group Co., Ltd.*).

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, each of the Purchasers and its ultimate beneficial owners is an Independent Third Party.

THE REASONS FOR AND BENEFITS OF THE DISPOSALS

Disposals as part of PYI Group's corporate refocus strategy

As set out in the Company's annual report for the year ended 31 March 2019 and interim results announcement for six months ended 30 September 2019, in light of current government policies which assert particular emphasis on more efficient utilisation of port assets in the Yangtze River region, PYI Group, in line with such policies, will continue to focus on capturing potential divestment opportunities to further crystalise the value of its Yangtze Strategy and refocus on other bulk commodities with higher growth potential, in particular LNG as well as exploring into other alternative business opportunities with a view to enhancing the Shareholders' value.

The Directors considered the Disposals as part of its corporate refocus strategy of PYI Group to redeploy its resources to refocus on other bulk cargo with particular emphasis on infrastructure development for LNG. The redeployment of resources had already begun when the Company completed the disposal of 宜昌港務集團有限責任公司 (Yichang Port Group Limited*), its subsidiaries and associated companies which were principally engaged in providing transportation, cargo logistics, storage, as well as container services in its 62.4%-owned Yunchi terminals, at the end of June 2019.

Support of Zhejiang Government and Jiangsu Government to Jiaxing Port and Jiangyin Port

The Zhejiang Government aims to improve the connectivity of each port resource by consolidating the management of ports in Zhejiang under the new integrated management model of ''One-masstwo-wings and multi-links'' (一體兩翼多聯), with the Port of Ningbo-Zhoushan being the main port and Jiaxing Port being part of the two- wings to support the integration of management model. The increasing importance of Jiaxing Port in accordance with the new management model is beneficial to its development in the near future.

The Jiangsu Government also announced the ''Jiangsu River Port Development Plan (2017-2035)'' (江蘇省內河港口佈局規劃 (2017年-2035年)), which emphasised on the intensification of river ports management and more efficient use of resources in port operations. The goal of this development plan is to increase the total throughput of the

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ports in Jiangsu, which includes Jiangyin Port, to approximately 670 million tonnes by 2025. Moreover, being an international port of call, Jiangyin Port will be a beneficiary of new shipping routes being developed under the ''One Belt, One Road'' strategy.

The Directors consider that the Disposals were entered into at an opportune time and present a good opportunity for PYI Group to realise a reasonable gain from such divestments, which will enhance PYI Group's financial position.

Considering the foregoing, the Directors consider that the terms of the Disposals are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECTS AND USE OF PROCEEDS OF THE DISPOSALS

Upon completion of the Disposals, PYI Group will cease to hold any interest in the Disposal Companies. Jiaxing Port and Paul Y. Corp will cease to be subsidiaries of the Company and their financial results will no longer be accounted for in the consolidated financial statements of the Company.

For illustrative purpose, based on (i) the Company's unaudited net carrying value of the Disposal Companies as at 30 September 2019; and (ii) the Consideration before the Adjustments, it is estimated that the Remaining Group will record a total gain on the Disposals of approximately RMB100 million (equivalent to HK$110 million), net of transaction costs and taxation. The respective gain from the Disposals is as follows:

1. a gain of approximately RMB68 million (equivalent to HK$75 million) from the disposal of Disposal Equity A; and
2. a gain of approximately RMB32 million (equivalent to HK$35 million) from the disposal of Disposal Equity B.

It should be noted that the actual gain on the Disposals to be recorded by the Remaining Group will depend on the final amount of the aforesaid Adjustments and the Company's carrying value of the Disposal Companies as at the Completion Date.

PYI Group expects to realise net proceeds of approximately RMB608 million, equivalent to HK$675 million (after deduction of transaction costs and taxation from the Disposals (assuming there will be no Adjustments) as follows:

1. approximately RMB345 million (equivalent to HK$383 million) from the disposal of Disposal Equity A; and
2. approximately RMB263 million (equivalent to HK$292 million) from the disposal of Disposal Equity B.

PYI Group intends to apply the net proceeds from the Disposals for repayment of bank loans and other borrowings when due, for new investments when opportunities arise with particular focus on the LNG sector, including capital expenditure on the LNG facilities under 湖北民生石油液化氣有限公司 (Hubei Minsheng Liquefied Petroleum Gas Limited*), and for general working capital of PYI Group.

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IMPLICATIONS UNDER THE LISTING RULES

As one of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Disposals, when aggregated as the Agreements were made with the Purchasers whose ultimate controlling shareholder is 浙江省海港投資運營集團有限公司 (Zhejiang Seaport Investment and Operation Group Co., Ltd.*), exceeds 75%, the Disposals constitute very substantial disposals for the Company pursuant to Rule 14.06(4) of the Listing Rules and are therefore subject to the notification, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

A circular containing, among other things, (i) further information relating to the Disposals; (ii) a notice convening the SGM; and (iii) other information as required to be disclosed under the Listing Rules, will be despatched to the Shareholders on or before 15 January 2020, as the Company expects that it will require more time to collate the financial information to be included in the circular.

Completion of the Disposals is subject to fulfilment of various conditions precedent as set out under the paragraph headed ''Conditions Precedent'' in this announcement including, among others, the approval of the relevant Disposals by the Shareholders at the SGM and applicable PRC authorities. Accordingly, the Disposals may or may not proceed. Shareholders and potential investors are therefore advised to exercise caution when dealing in the securities of the Company.

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange has been suspended from 10:56 a.m. on 16 December 2019. An application has been made to the Stock Exchange for the resumption of trading in Shares with effect from 1:00 p.m. on 16 December 2019.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

''Adjustments''	collectively, Adjustment A and Adjustment B
''Adjustment A''	has the meaning ascribed to it in the sub-paragraph
	headed ''Adjustment A'' under ''Agreement A'' of this
	announcement
''Adjustment B''	has the meaning ascribed to it in the sub-paragraph
	headed ''Adjustment B'' under ''Agreement B'' of this
	announcement
''Agreements''	collectively, Agreement A and Agreement B, and each
	an ''Agreement''

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''Agreement A''

''Agreement B''

''Approved Valuer'' ''Board'' ''Business Day(s)''

''Company'' or ''PYI''

''Completion Date''

''Completion Date A''

''Completion Date B''

''Completion Period''

''Conditions Precedent A''

''Conditions Precedent B''

''connected person(s)''

the conditional agreement dated 16 December 2019 and entered into among the Company, Jiaxing Feeder and Purchaser A relating to Disposal A

the conditional agreement dated 16 December 2019 and entered into among the Company, PYI Nantong and Purchaser B relating to Disposal B

a PRC valuer approved by the relevant PRC authority

the board of Directors

a day, other than a Saturday, Sunday, bank holidays and other public holidays, on which banks in the PRC and Hong Kong are open for normal business

PYI Corporation Limited, a company incorporated in Bermuda with limited liability, the issued Shares of which are listed on the Stock Exchange (stock code: 498)

Completion Date A and Completion Date B collectively, and ''Completion Date'' means any of them and, in the context of Agreement A means Completion Date A and in the context of Agreement B means Completion Date

B

in respect of Disposal A, the date on which the registration of change in relation to the transfer of Disposal Equity A at the relevant PRC government authority is completed

in respect of Disposal B, the date on which the instrument of transfer and bought and sold notes were signed in relation to the transfer of Disposal Equity B

the period of 4 months commencing from the signing of the Agreements

conditions (a) to (k) set out in the paragraph headed ''CONDITIONS PRECEDENT'' and the conditions set out in the paragraph headed ''ADDITIONAL INITIAL CONDITIONS PRECEDENT OF AGREEMENT A'' of this announcement

conditions (a) to (k) set out in the paragraph headed ''CONDITIONS PRECEDENT'' of this announcement

has the meaning ascribed thereto under the Listing Rules

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''Consideration''

''Consideration A''

''Consideration B''

''Director(s)'' ''Disposals''

''Disposal A''

''Disposal B''

''Disposal Companies''

''Disposal Equity A''

''Disposal Equity B''

''Disposal Group''

''HK GAAP''

''HK$''

''Hong Kong''

Consideration A and Consideration B collectively, and ''Consideration'' means any of them and, in the context of Agreement A means Consideration A and in the context of Agreement B means Consideration B

the initial consideration of approximately RMB373 (equivalent to HK$414 million), as adjusted by Adjustment A, payable by Purchaser A for Disposal Equity A

the initial consideration of approximately RMB286 million (equivalent to HK$318 million), as adjusted by Adjustment B, payable by Purchaser B for Disposal Equity B

the director(s) of the Company

Disposal A and Disposal B collectively, and ''Disposal'' means any of them and, in the context of Agreement A means Disposal A and in the context of Agreement B means Disposal B

the proposed disposal of Disposal Equity A by Jiaxing Feeder to Purchaser A pursuant to Agreement A

the proposed disposal of Disposal Equity B by PYI Nantong to Purchaser B pursuant to Agreement B

collectively Jiaxing Port and Paul Y. Corp and each a ''Disposal Company''

the 90% equity interest in Jiaxing Port held by Jiaxing Feeder as at the date of this announcement

the entire issued share capital of Paul Y. Corp held by PYI Nantong as at the date of this announcement

the Disposal Companies and their respective subsidiaries, and in respect of each Disposal, the relevant Disposal Company and (if any) its subsidiaries

the accounting principles generally accepted in Hong Kong

Hong Kong dollars, the lawful currency of Hong Kong

the Hong Kong Special Administrative Region of the

PRC

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''Independent Third Party(ies)'' the third parties independent of the Company and its

	connected persons
''Initial Conditions	conditions (a)(i) to (a)(iv) set out in the paragraph
Precedent A''	headed ''CONDITIONS PRECEDENT'' of this
	announcement and conditions (i) to (iii) set out in the
	paragraph	headed	''ADDITIONAL	INITIAL
	CONDITIONS PRECEDENT OF AGREEMENT A'' of
	this announcement
''Initial Conditions	conditions (a)(i) to (a)(iv) set out in the paragraph
Precedent B''	headed ''CONDITIONS PRECEDENT'' of this
	announcement
''Jiangyin Port''	江陰蘇南國際集裝箱碼頭有限公司 (Jiangyin Sunan
	International Container Terminal Co., Ltd.*), a 40%-
	owned associate company of Paul Y. Corp and a sino-
	foreign joint venture enterprise established in the PRC
	with limited liability
''Jiaxing Feeder''	Jiaxing Feeder Port Investment Limited, a company
	incorporated in Hong Kong with limited liability and an
	indirect wholly-owned subsidiary of the Company,
	being the vendor of Disposal Equity A
''Jiaxing Port''	嘉興內河國際集裝箱碼頭有限公司 (Jiaxing International
	Container Feeder Port Limited*), an indirect 90%-
	owned subsidiary of the Company and a sino-foreign
	joint venture enterprise established in the PRC with
	limited liability
''Listing Rules''	the Rules Governing the Listing of Securities on the
	Stock Exchange
''LNG''	liquefied natural gas
''Material Adverse	any of the events described in paragraph (k)(i) to (vi)
Effect''	for Agreement A and any of the events described in
	paragraph (k)(i) to (vii) for Agreement B set out in the
	paragraph headed ''CONDITIONS PRECEDENT'' of
	this announcement
''Ningbo Port''	寧波舟山港股份有限公司 (Ningbo Zhoushan Port
	Company Limited*), a company established in the PRC
	with limited liability and the issued shares of which are
	listed on the Shanghai Stock Exchange (stock code:
	601018)

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''Paul Y. Corp''

''PRC'' or ''China''

''PRC GAAP''

''Purchasers''

''Purchaser A''

''Purchaser B''

''PYI Group''

''PYI Nantong''

''Remaining Group'' ''RMB''

''SGM''

''Share(s)''

''Shareholder(s)'' ''Stock Exchange'' ''TEU''

Paul Y. Corporation Limited, a company incorporated in Hong Kong with limited liability and an indirect wholly- owned subsidiary of the Company

the People's Republic of China, which for the purpose of this announcement, shall exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

the accounting principles generally accepted in the

PRC

collectively, Purchaser A and Purchaser B, and each a ''Purchaser''

浙江海港內河港口發展有限公司 (Zhejiang Seaport Inland River Port Development Company Limited*), a company established in the PRC with limited liability and a wholly-owned subsidiary of 浙江省海港投資運營 集團有限公司 (Zhejiang Seaport Investment and Operation Group Co., Ltd.*)

Ming Cheng International Company Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of Ningbo Port

the Company and its subsidiaries

PYI Nantong Port Limited, a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of the Company, being the vendor of Disposal Equity B

PYI Group, excluding the Disposal Group

Renminbi, the lawful currency of the PRC

the special general meeting of the Company to be convened for the purpose of considering and, if thought fit, to approve the Disposals, the Agreements and the transactions contemplated thereunder

the ordinary share(s) of HK$0.10 each in the capital of the Company

the holder(s) of the Share(s)

The Stock Exchange of Hong Kong Limited

Twenty-foot Equivalent Unit

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''Vendors''	collectively Jiaxing Feeder and PYI Nantong and each
	a ''Vendor''
''%''	per cent.

For the purpose of this announcement, unless otherwise stated, the conversion of RMB into HK$ is based on the exchange rate of HK$1.00 to RMB0.90. The exchange rate has been used, where applicable, for the purposes of illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates at all.

• In this announcement, the English names of the PRC entities marked in asterisks are direct translations of their respective Chinese names and are included herein for identification purpose only. In the event of any inconsistency, the Chinese names shall prevail.

By order of the Board

PYI Corporation Limited

Lau Tom Ko Yuen

Chairman and Managing Director

Hong Kong, 16 December 2019

As at the date of this announcement, the composition of the Board is as follows:

Mr Lau Tom Ko Yuen	:	Chairman and Managing Director
Mr Sue Ka Lok	:	Executive Director
Ms Wu Yan Yee	:	Executive Director
Mr Chan Shu Kin	:	Independent Non-Executive Director
Ms Wong Lai Kin, Elsa	:	Independent Non-Executive Director
Mr Leung Chung Ki	:	Independent Non-Executive Director

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