China Yongda Automobile Services Hldg : Yongda Auto proposes spin-off of its 4S Dealership...

(Hong Kong, 15 April 2016) China Yongda Automobiles Services Holdings Limited ('Yongda Auto' or the 'Company' and, together with its subsidiaries, the 'Group', stock code: 3669.HK), a leading passenger vehicle retailer and comprehensive service provider in China, announces details of the proposed spin-off of the Group. The Group, through Yongda Investment, an indirect wholly-owned subsidiary of the Company, entered into the Share Issuance and Asset Purchase Agreement, the Share Transfer Agreement and the Material Asset Disposal Agreement in connection with the proposed spin-off. Suzhou Yangtze New Materials Co., Ltd (Yangtze New Materials') (SZSE stock code: 002652), a Shenzhen A-share listed company, will purchase 100% equity interests in Shanghai Yongda Automobile Group Co., Ltd ('Automobile Group'), a wholly-owned subsidiary of Yongda Investment, which focuses on the 4S dealership business and the Finance Leasing Business. The consideration will be settled by allotment and issue of the consideration shares by Yangtze New Materials to Yongda Investment, and through injecting its 4S Dealership and related Automobile Finance Businessinto Yangtze New Materials, those parts of the business will be listed on A-share.

The consideration for the Automobile Group Disposal is RMB12 billion, Yangtze New Materials will acquire the Automobile Group by allotment and issue of the consideration shares; Yongda Investment agreed to purchase 26.8 million A-shares in the Yangtze New Materials for a total consideration of RMB325 million, which was priced at RMB12.12 per Placing Share; Yongda Investment agreed to purchase all the assets and liabilities of Yangtze New Materials for a total consideration of RMB613 million, and in turn agreed to sell those assets.

Meanwhile, to support the further development of Automobile Group, Yangtze New Materials plans to allot and issue by way of non-public offer no more than 512 million Placing Shares to no more than 10 qualified designated investors in the PRC at an issue price of not less than RMB9.77 per placing share to raise no more than RMB5 billion. Upon completion of the asset restructuring, Yongda Investment will hold approximately 60.92% A-shares in Yangtze New Materials as enlarged by the allotment and issue of the shares.

Mr. Cheung Tak On, Chairman of Yongda Auto states, 'This spin-off marks an important milestone in Yongda Auto' evolution, which also reaffirms its fair value in the marketplace thus strengthening its business developmentand protecting benefits for all shareholders. Upon completion of all the mentioned transactions, Yongda Auto will be able to add one more major financing platform and reinforce its leading market position in the Chinese automotive industry through Yangtze New Materials. The Company can also take advantage of the rapid growing automobile finance business in the Mainland China. Upon the completion of the transactions, Yangtze New Materials will create access to investors and various investment opportunities to the automotive industry. We believe the spin-off will bring fair and optimistic rewards to both substantial and minority shareholders. The platform will share more knowledge and norms about the Company's internal value. In the meantime, under a framework with greater transparency, Hong Kong listed companies will concentrate resource to develop various business independently, which could possibly benefit the Group's long term development and bring desirable returns to shareholders.'

Subject to the agreements of the Profit Compensation Agreement, Yongda Investment agreed to undertake to Yangtze New Materials on the committed net profits. The committed net profit of Automobile Group for 2016, 2017 and 2016 are RMB800 million, RMB 1,000 million and RMB1,200 million, respectively.

For more details, please refer to the announcement published on the HKEx website and the Company website.

Appendix: Summary of the Proposed Spin-off

Spin-off Asset:	Ÿ Automobile Group and its 4S Dealership Business and related Automobile Finance Business
Consideration:	Ÿ Based on the Consideration of RMB12,000 million and the issue price per Consideration Share of RMB9.77, Yangtze New Materials will issue approximately 1,228 million consideration shares to Yongda Investment to satisfy the consideration. Ÿ Yangtze New Materials will allot and issue 26.8 million consideration shares to Yongda Investment at RMB12.12 per share. Ÿ Upon the completion of the transactions, Yongda Investment will hold approximately 60.92% of the enlarged equity interests in Yangtze New Materials
Fund Raising:	Ÿ Yangtze New Materials plans to allot and issue by way of non-public offer no more than 512 million Placing Shares to no more than 10 qualified designated investors at the issure price of not less than RMB9.77 per Placing Share to raise no more than RMB5 billion for the further development of Automobile Group

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About China Yongda Automobiles Services Holdings Limited (Stock Code: 3669)

Yongda Auto is a leading passenger vehicle retailer and comprehensive service provider in China, focuses on luxury and ultra-luxury automobile brands, including BMW, Mini, Audi, Porsche, Jaguar Land Rover, Bentley, Infiniti, Cadillac, Volvo, Lincoln and Lexus. Yongda Auto's extensive 4S dealership network has a strong presence in East China (including Shanghai). The Company operates a total of 225 outlets that opened and to be opened,and is gradually expanding into other major cities in China. Besides sales business of passenger vehicle, Yongda Auto is committed to providing customers with a comprehensive range of automobile-related services through its 'one-stop shop' approach, which includes after-sales products and services, automobile rental as well as a wide range of other services like pre-owned vehicles, finance insurance and leasing products, automobile finance and other related services.

Issued by PR ASIA Consultants Limited on behalf of China Yongda Automobiles Services Holdings Limited.

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