BYD Electronic International : CONNECTED TRANSACTION

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(incorporated in Hong Kong under the Companies Ordinance with limited liability)

(Stock code: 285)

CONNECTED TRANSACTION

On 21 February 2020, the Company entered into the Assets Purchase Agreement with BYD and the transaction thereunder constitutes connected transaction of the Company.

As BYD is the controlling Shareholder of the Company indirectly interested in approximately 65.76% of the issued share capital of the Company, it is a connected person of the Company. As such, the Assets Purchase Transaction constitutes connected transaction of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in respect of the Assets Purchase Transaction (after aggregation with the June 2019 Assets Purchase Transaction) exceed 0.1% but are less than 5%, the Assets Purchase Transaction is subject to the reporting and announcement requirements but is exempt from the independent Shareholders' approval requirement set out in Chapter 14A of the Listing Rules.

CONNECTED TRANSACTION

Details of the Assets Purchase Agreement are set out below:

THE ASSETS PURCHASE AGREEMENT

Date:	21 February 2020
Parties:	The Company as purchaser
	BYD as seller
Consideration:	The total consideration for the assets which the BYD Group agreed to
	sell to the Group shall be equal to the unaudited net asset value of such
	assets as at the day of delivery and shall be payable by the Group to the
	BYD Group in cash.
	As at 31 December 2019, the unaudited net asset value of the assets
	was approximately RMB34,840,000, which is expected to be subject
	to a downward adjustment as at the day of delivery of the assets due to
	depreciation accrued up to delivery.

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	The consideration was determined after arm's length negotiation
	between the parties by reference to the unaudited net book value of the
	assets as at 31 December 2019, depreciation of the assets to be accrued
	up to delivery, working conditions of the assets and current market
	value of assets of similar capability.
	The consideration shall be financed by internal resources of the Group.
Assets acquired:	Assets purchased by the Group from the BYD Group comprise
	primarily vertical machining center (立式加工中心), drilling machining
	center (鑽削加工中心), six-axis robot (六軸機器人) and other related
	equipment.
	The aggregate original acquisition cost of the said assets paid by the
	BYD Group was approximately RMB158,671,000.
Delivery:	Delivery shall take place within 30 days after (i) the execution of the
	Assets Purchase Agreement and (ii) the relevant approval (if required)
	has been obtained from the relevant PRC government authority,
	including the PRC customs authority (as the case may be).
Payment Term:	The consideration shall be paid by the Group in cash within 60 days
	after delivery of the relevant assets by the BYD Group to the Group.
Completion:	Completion for the purchase of the said assets will take place upon
	the payment in respect of such assets by the Group to the BYD Group,
	subject to the condition that the representations and warranties set forth
	in the Assets Purchase Agreement in relation to due and proper working
	conditions of the relevant assets remain true and accurate at that time.

REASONS FOR AND BENEFITS OF THE ASSETS PURCHASE TRANSACTION

In recent years, along with the continued rising of the penetration of glass parts, the Group has actively worked on the glass segment and smoothly expanded its customer base, thereby imposing further requirements on its production capacity. Also, as the businesses of the Group keep growing, the Group intends to promote business development through expanding production capacity so as to respond to customers' needs promptly. The Group has agreed to purchase relevant assets from BYD in order to rapidly expand production capacity and promote the growth of relevant business.

It is believed that the purchase of assets from the BYD Group is the fastest and more cost-effective way to expand the Group's product lines of business. Due to the proximity of the location of the Group and the BYD Group, the Group will benefit from reduced transportation cost and more convenient testing of the assets by purchasing the same from BYD.

The terms of the Assets Purchase Transaction have been negotiated on an arm's length basis. The Directors, including the independent non-executive Directors, believe that the Assets Purchase Transaction has been entered into in the ordinary and usual course of the business of the Company on normal commercial terms and the terms of the Assets Purchase Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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INFORMATION ON THE GROUP AND THE BYD GROUP

The Group is principally engaged in the business of the manufacture and sales of handset components and modules, the provision of handset design and assembly services, and the provision of parts and assembly services of other electronic products.

The BYD Group is principally engaged in rechargeable battery and photovoltaic business, handset components and assembly services, as well as automobile business which includes traditional fuel- engined vehicles and new energy vehicles and is actively developing the urban rail transportation business segment.

LISTING RULES REQUIREMENTS

As BYD is the controlling Shareholder of the Company indirectly interested in approximately 65.76% of the issued share capital of the Company, it is a connected person of the Company. As such, the Assets Purchase Transaction constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. Mr. WANG Chuan-fu, being a non-executive Director of the Company, is also an executive director and chairman of the board of directors of BYD and is interested in approximately 19.00% of the total issued share capital of BYD as at the date of the Assets Purchase Agreement. Accordingly, Mr. WANG Chuan-fu, being a Director who may have a material interest, had voluntarily abstained from voting on the board resolutions of the Company concerning the Assets Purchase Transaction.

As the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in respect of the Assets Purchase Transaction (after aggregation with the June 2019 Assets Purchase Transaction) exceed 0.1% but less than 5%, the Assets Purchase Transaction is subject to the reporting and announcement requirements but is exempt from the independent Shareholders' approval requirement set out in Chapter 14A of the Listing Rules.

The Company, being a non wholly-owned subsidiary of BYD, is not a connected person of BYD under Rule 14A.16(1) of the Listing Rules as, to the best knowledge, information and belief of the Directors after making all reasonable enquiry, (a) none of the connected persons of BYD is or are (individually or together) entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of the Company; and (b) the Company is not an associate of the connected persons of BYD. Accordingly, the Assets Purchase Transaction does not constitute a connected transaction for BYD under Chapter 14A of the Listing Rules.

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DEFINITIONS

In this announcement, the following expressions shall have the following meanings unless the context otherwise requires:

"Assets Purchase	the purchase agreement dated 21 February 2020 entered into
Agreement"	between the Company and BYD for the purchase of assets by the
	Group from the BYD Group;
"Assets Purchase	the transaction contemplated under the Assets Purchase
Transaction"	Agreement;
"associate(s)"	has the meaning ascribed to it under the Listing Rules;
"Board"	the board of Directors or a duly authorised committee of the
	board of Directors;
"BYD Group"	BYD and its subsidiaries (excluding, except where the context
	indicates otherwise, the Group);
"BYD"	BYD Company Limited, a joint stock company incorporated in the
	PRC with limited liability whose H shares are listed on the Main
	Board of the Stock Exchange and A shares are listed on the Small
	and Medium Enterprise Board of the Shenzhen Stock Exchange;
"Company"	BYD Electronic (International) Company Limited, a company
	incorporated in Hong Kong with limited liability whose Shares
	are listed on the Stock Exchange;
"connected person(s)"	has the meaning ascribed to it under the Listing Rules;
"controlling Shareholder"	has the meaning ascribed to it under the Listing Rules;
"Director(s)"	the director(s) of the Company;
"Group"	the Company and its subsidiaries;
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC;
"June 2019 Assets	the transaction completed under the purchase agreement dated 28
Purchase Transaction"	June 2019 entered into between the Company and BYD, details of
	which were set out in the announcement of the Company dated 28
	June 2019;
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange, as amended from time to time;

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"PRC"	the People's Republic of China (for the purpose of this
	announcement, excluding Hong Kong, Macau Special
	Administrative Region of the People's Republic of China and
	Taiwan);
"RMB"	Renminbi, the lawful currency of the PRC;
"Shareholder(s)"	holder(s) of the share(s) of the Company;
"Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"subsidiary(ies)"	has the meaning ascribed to it under the Listing Rules; and
"%"	per cent.
	By order of the Board of
	BYD Electronic (International) Company Limited
	Wang Nian-qiang
	Director
Hong Kong, 21 February 2020

As at the date of this announcement, the Board consists of Mr. WANG Nian-qiang and Mr. JIANG Xiang-rong being the executive Directors, Mr. WANG Chuan-fu and Mr. WANG Bo being non- executive Directors and Mr. CHUNG Kwok Mo John, Mr. Antony Francis MAMPILLY and Mr. QIAN Jing-jie being the independent non-executive Directors.

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