China Ecotourism : • (I) Placing of Untaken Shares (II) Completion of the Rights Issue and the Placing and (III) Adjustment to Conversion Price of the New Option 1 Bonds

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.

China Ecotourism Group Limited

中 國 生 態 旅 遊 集 團 有 限 公 司

1. 1. PLACING OF UNTAKEN SHARES
2. COMPLETION OF THE RIGHTS ISSUE AND THE PLACING AND
3. 1. ADJUSTMENT TO CONVERSION PRICE OF

THE NEW OPTION 1 BONDS

Financial Adviser to the Company

PLACING OF UNTAKEN SHARES

The Board is pleased to announce that the Placing Agents have successfully placed 489,055,933 Untaken Shares to six (6) placees at the Placing Price of HK$0.10 per Placing Share pursuant to the terms of the Placing Agreement.

COMPLETION OF THE RIGHTS ISSUE AND THE PLACING

All conditions to the Rights Issue and the Placing were fulfilled. Accordingly, the Rights Issue and the Placing became unconditional at or before 4:00 p.m. on 10 June 2021, and were completed on 10 June 2021.

DESPATCH OF SHARE CERTIFICATES FOR FULLY-PAID RIGHTS SHARES

The share certificates for the fully-paid Rights Shares are expected to be posted by Friday, 11 June 2021 to those entitled to them at their registered addresses by ordinary post at their own risk. Since the Rights Issue became unconditional and proceeded to completion and all excess Rights Shares applied for can be allotted in full, no refund cheque will be posted to any accepting or applying Shareholders.

• For identification purposes only

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COMMENCEMENT OF DEALINGS OF RIGHTS SHARES IN FULLY-PAID FORM AND PLACING SHARES

Dealings in the fully-paid Rights Shares and the Placing Shares are expected to commence on the Stock Exchange at 9:00 a.m. on Tuesday, 15 June 2021.

References are made to (i) the circular of China Ecotourism Group Limited (formerly known as China LotSynergy Holdings Limited, the ''Company'') dated 14 April 2021 (the ''Circular''); (ii) the prospectus of the Company dated 21 May 2021 (the ''Prospectus''); and (iii) the announcement of the Company dated 7 June 2021 (the ''Announcement'') regarding the Rights Issue. Unless otherwise defined, capitalised terms used herein shall have the same meanings as those defined in the Circular and the Prospectus.

PLACING OF UNTAKEN SHARES

As disclosed in the Announcement, valid acceptances of PALs and applications under EAFs were received for 1,569,905,533 Rights Shares. Accordingly, during the placing period between 8 June 2021 and 9 June 2021, the Placing Agent conducted the Placing on a best- effort basis to seek to procure placees to subscribe for up to 489,055,933 Untaken Shares under the Rights Issue.

The Board is pleased to announce that the Placing Agents have successfully placed all Untaken Shares to six (6) placees at the Placing Price of HK$0.10 per Placing Share pursuant to the terms of the Placing Agreement.

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, (i) each of the Placees and where appropriate, their respective ultimate beneficial owner(s): (A) is independent of and not connected with the Company and its connected persons and not a connected person of the Company; and (B) independent from, and not acting in concert with, Ms. Lau; and (ii) none of the Placees has become a substantial shareholder of the Company (as defined under the Listing Rules) upon completion of the Placing.

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COMPLETION OF THE RIGHTS ISSUE AND THE PLACING

All conditions to the Rights Issue and the Placing were fulfilled. Accordingly, the Rights Issue and the Placing became unconditional at or before 4:00 p.m. on 10 June 2021.

On completion of the Rights Issue and the Placing which took place on 10 June 2021:

1. 650,070,674 Rights Shares were allotted and issued under valid acceptances of PALs and 919,834,859 Rights Shares were allotted and issued under valid application of EAFs, representing in aggregate approximately 76.25% of the total number of 2,058,961,466 Rights Shares available for subscription under the Rights Issue; and
2. 489,055,933 Untaken Shares were allotted and issued to six (6) placees procured by the Placing Agent under the Placing.

Therefore, the total number of Shares taken by Shareholders under PALs and EAFs under the Rights Issue and the Shares placed under the Placing represents the total number of 2,058,961,466 Rights Shares available for subscription under the Rights Issue.

INTENDED USE OF THE NET PROCEEDS FROM THE RIGHTS ISSUE AND THE PLACING

The gross proceeds from the Rights Issue and the Placing are approximately HK$205.90 million and the net proceeds from the Rights Issue and the Placing, after deducting the relevant expenses, are estimated to be approximately HK$199.40 million. The Company has applied and will apply the net proceeds of the Rights Issue and the Placing in the following manner:

1. approximately HK$80.00 million (or approximately 40.12% of the net proceeds) will be used towards the repayment in part of the New Option 1 Bonds;
2. approximately HK$30.00 million (or approximately 15.05% of the net proceeds) will be used towards the partial repayment of an existing bank borrowing;
3. HK$50.00 million (or approximately 25.08% of the net proceeds) has been used towards the Set-Off; and
4. approximately HK$39.40 million (or approximately 19.76% of the net proceeds) will be used towards the general working capital of the Group.

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EFFECT OF THE RIGHTS ISSUE AND THE PLACING ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

Based on the information available to the Company and to the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, the shareholding structure of the Company immediately before and after completion of the Rights Issue and the Placing are as follows:

	Immediately before	Immediately after
	the Rights Issue	completion of the Rights
Shareholders	Settlement Date	Issue and the Placing
			Approximate			Approximate
			shareholding			shareholding
	No. of Shares	percentage (%)	No. of Shares	percentage (%)
Ms. Lau (Note 1)	91,509,437	8.89	1,028,127,586		33.28
Parties acting in concert with
Ms. Lau
Hang Sing Overseas Limited (Note 2)	7,505,287	0.73	7,505,287		0.24
Strong Purpose Corporation (Note 3)	13,773,554	1.34	13,773,554		0.45
Glory Add Limited (Note 4)	51,249,259	4.98	51,249,259		1.66
Mr. Chan Shing (Note 5)	24,248,642	2.36	24,248,642		0.79
Ms. Chan (Note 6)	15,936,000	1.54	85,936,000		2.78
Sub-total of Ms. Lau and parties
acting in concert with the her	204,222,179	19.84	1,210,840,328		39.20
Other Directors (Note 7)
Mr. Wu Jingwei (Note 8)	8,220,000		0.80	24,660,000		0.80
Mr. Li Zi Kui (Note 8)	2,800,000	0.27	4,800,000		0.16
Ms. Zhu Xinxin (Notes 8 and 9)	1,850,000	0.18	5,850,000		0.19
Mr. Huang Shenglan (Note 8)	110,000		0.01	110,000	0.00
Mr. Cui Shuming (Note 8)	200,000		0.02	200,000	0.01
Sub-total of other Directors
13,180,000	1.28	35,620,000		1.16
Independent placees	-	-	489,055,933		15.83
Other public Shareholders	812,078,554		78.88	1,352,925,938		43.81
Sub-total of public Shareholders
812,078,554		78.88	1,841,981,871		59.64
Total	1,029,480,733		100.00	3,088,442,199	100.00

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Notes:

1. Ms. Lau, as beneficial owner, together with entities controlled by her, namely, (i) Hang Sing Overseas Limited; (ii) Strong Purpose Corporation; and (iii) Glory Add Limited, was interested in a total of 164,037,537 Shares immediately before the Rights Issue Settlement Date and 1,100,655,686 Shares immediately after completion of the Rights Issue and the Placing, the details of which are set out in the table above and notes 2 to 4 below.
2. Hang Sing Overseas Limited was wholly owned by Orient Strength Limited, which was wholly owned by Ms. Lau. Ms. Lau is therefore deemed to be interested in the Shares held by Hang Sing Overseas Limited under the SFO.
3. Strong Purpose Corporation was wholly owned by Ms. Lau and Mr. Chan Shing. Each of Ms. Lau and Mr. Chan Shing is therefore deemed to be interested in the Shares held by Strong Purpose Corporation under the SFO.
4. Glory Add Limited was wholly owned by Favor King Limited, which was wholly owned by Ms. Lau and Mr. Chan Shing. Each of Ms. Lau and Mr. Chan Shing is therefore deemed to be interested in the Shares held by Glory Add Limited under the SFO.
5. Mr. Chan Shing is a party acting in concert with Ms. Lau. Please also refer to notes 3 and 4 above for the interest held by entities controlled by Mr. Chan Shing.
6. Ms. Chan is the daughter of Ms. Lau and an executive Director. By virtue of being a close relative of Ms. Lau, Ms. Chan is presumed to be a party acting in concert with Ms. Lau pursuant to class (8) presumption under the definition of ''acting in concert'' under the Takeovers Code.
7. The Shares held by the other Directors consist of the Shares held by Directors other than Ms. Chan.
8. Mr. Wu Jingwei, Mr. Li Zi Kui and Ms. Zhu Xinxin are executive Directors, and Mr. Huang Shenglan and Mr. Cui Shuming are independent non-executive Directors.
9. Ms. Zhu Xinxin is a niece of Ms. Lau and a cousin of Ms. Chan and was appointed as an executive Director of the Company with effect from 18 June 2019 by the Board on 18 June 2019 in accordance with bye-law 102(B) of the Company. Ms. Zhu is not a party acting in concert with Ms. Lau.

DESPATCH OF SHARE CERTIFICATES FOR FULLY-PAID RIGHTS SHARES

The share certificates for the fully-paid Rights Shares are expected to be posted by Friday, 11 June 2021 to those entitled to them at their registered addresses by ordinary post at their own risk. Since the Rights Issue became unconditional and proceeded to completion and all excess Rights Shares applied for can be allotted in full, no refund cheque will be posted to any accepting or applying Shareholders.

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