Kunming Yanheng Automobile Sales Services Company Limited entered into intention agreement to acquire 4 Subsidiaries of China Rundong Auto Group Limited (SEHK:1365) for CNY 3.4 billion on April 4, 2019. Kunming Yanheng Automobile Sales Services Company Limited shall pay a deposit of not less than CNY 1.36 billion prior to entering into the formal share purchase agreement and the remaining consideration and its manner of payment shall be subject to the terms and conditions of the formal share purchase agreement. The transaction is conditional upon the fulfilment or waiver of the corporate reorganization of the Group to be stated in the formal share purchase agreement and all relevant registrations, filings and transactions, Kunming Yanheng Automobile Sales Services Company Limited, all subsidiaries and China Rundong Auto Group Limited having obtained all necessary approvals required for the completion and fulfilment of the terms, the overall consolidated asset-liability ratio of the subsidiaries being lower than 80% as at September 30, 2018 based on the management accounts of the group, being the reference date for the financial due diligence of the group, between the date of the Intention Agreement and the date of completion to be stated in the formal share purchase agreement there having been no material adverse effect on the assets, operations and management of the 4 subsidiaries, China Rundong Auto Group Limited and the 4 subsidiaries having fulfilled and complied with the terms of the intention agreement and their respective undertakings and obligations having been fulfilled before the date of completion, there having been no order, prohibition or restriction under any laws or regulations that may hinder China Rundong Auto Group Limited in completing the proposal disposal under the intention agreement and any other conditions precedent stipulated in the formal share purchase agreement.