China Zhongwang : INSIDE INFORMATION FRAMEWORK AGREEMENT ON THE POTENTIAL SPIN-OFF AND DISCLOSEABLE TRANSACTION UPDATE ON DEEMED DISPOSAL AND TRANSFER OF EQUITY INTEREST IN LIAONING ZHONGWANG

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(incorporated in the Cayman Islands with limited liability)

(Stock Code: 01333)

INSIDE INFORMATION

FRAMEWORK AGREEMENT ON THE POTENTIAL SPIN-OFF

AND

DISCLOSEABLE TRANSACTION

UPDATE ON DEEMED DISPOSAL AND TRANSFER OF

EQUITY INTEREST IN LIAONING ZHONGWANG

1. FRAMEWORK AGREEMENT ON THE POTENTIAL SPIN-OFF

This part of this announcement is made by China Zhongwang Holdings Limited (the ''Company'') pursuant to Rule 13.09(2)(a) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ''Listing Rules'') and the Inside Information Provisions (as defined under the Listing Rules) of Part XIVA of the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong).

The Framework Agreement

The board (the ''Board'') of directors (the ''Directors'') of the Company is pleased to

announce that, on 17 March 2020 (after trading hours), Liaoning Zhongwang Superior Fabrication Investment Limited (遼寧忠旺精製投資有限公司, ''Zhongwang Fabrication''), an indirect wholly-owned subsidiary of the Company and CRED Holding Co., Ltd. (中房置業股份有限公司, ''CRED Holding''), entered into a non- binding framework agreement (the ''Framework Agreement'') in relation to a material

assets restructuring by way of the injection of approximately 96.55% equity interests in Liaoning Zhongwang Group Ltd. (遼寧忠旺集團有限公司, ''Liaoning Zhongwang'') held by Zhongwang Fabrication into CRED Holding so as to achieve the listing of the business of Liaoning Zhongwang on the Shanghai Stock Exchange (the ''Potential Spin-off'').

Pursuant to the Framework Agreement, Zhongwang Fabrication agreed to sell and CRED Holding agreed to purchase approximately 96.55% equity interests in Liaoning Zhongwang held by Zhongwang Fabrication, and CRED Holding agreed to sell and

Zhongwang Fabrication agreed to purchase the 100% equity interests in Xinjiang CRED Holding Company Limited (新疆中房置業有限公司, ''CRED Xinjiang''), a wholly- owned subsidiary of CRED Holding (the ''Proposed Transactions''). The consideration of the Proposed Transactions will be determined with reference to, among other things, the valuation of Liaoning Zhongwang and CRED Xinjiang prepared by independent

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valuers and the shortfall between the disposal and the acquisition will be satisfied by CRED Holding by way of issuance of consideration shares to Zhongwang Fabrication (the ''Consideration Shares''). The number and issue price of the Consideration Shares will be determined with reference to the valuation of the underlying assets and based on the negotiation between both parties and are subject to the applicable regulations of the China Securities Regulation Commission. The Proposed Transactions are still subject to the terms and conditions under the final definitive agreement of the Potential Spin-off (the ''Final Agreement'') to be entered into between Zhongwang Fabrication and CRED Holding. Both parties to the Framework Agreement agreed to negotiate in good faith and make reasonable endeavours to procure the completion of the Potential Spinoff and has agreed that there will be a six-month exclusive period commencing from the date of execution of the Framework Agreement, during which both parties shall seek for the consent from another party before entering into the negotiations with third parties in respect of the same or similar transactions as the Proposed Transactions.

Reasons for and Benefits of the Potential Spin-off

The Board believes that the Potential Spin-off would enable the market to appraise and assess the value of the Company more effectively and provide a separate fund-raising platform for the Company.

If the Potential Spin-off materializes and upon the completion of the transactions contemplated under the Final Agreement, it is expected that Liaoning Zhongwang will become a direct wholly-owned subsidiary of CRED Holding and remain as an indirect non-wholly-owned subsidiary of the Company.

Implication of the Listing Rules

In the event that the Potential Spin-off materializes, it will constitute a notifiable transaction of the Company under the Listing Rules and may require approval by the shareholders of the Company. The Potential Spin-off constitutes a spin-off pursuant to the applicable requirements under Practice Note 15 to the Listing Rules and is subject to the approval of The Stock Exchange of Hong Kong Limited (the ''Stock Exchange''). The Company will make such further announcement(s) in relation to the Potential Spin-off as and when appropriate.

General Information of the Parties Involved

Zhongwang Fabrication

Zhongwang Fabrication is a limited liability company incorporated under the laws of the PRC. As at the date of this announcement, Zhongwang Fabrication is an indirect wholly-owned subsidiary of the Company. Zhongwang Fabrication is principally engaged in investment holding.

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CRED Holding

CRED Holding is a joint stock limited company incorporated under the laws of the PRC whose issued shares are listed on the Shanghai Stock Exchange (stock code: 600890.SH). CRED Holding is principally engaged in property sales and rental business. To the best knowledge, information and belief of the Directors having made all reasonable enquiries, as at the date of this announcement, CRED Holding and its ultimate beneficial owners are independent third parties of the Company.

Liaoning Zhongwang

Liaoning Zhongwang is a limited liability company incorporated under the laws of the PRC and is principally engaged in the production and sale of aluminium extrusion products. As at the date of this announcement, the Company (through Zhongwang Fabrication) holds approximately 96.55% equity interests in Liaoning Zhongwang.

Shareholders and potential investors of the Company should note that the Potential Spin-off may or may not proceed and the Final Agreement and the transactions contemplated thereunder, if and when finalized, will be subject to various regulatory and corporate approvals. In particular, the Potential Spin-off is subject to the approval of the Stock Exchange pursuant to the applicable requirements under Practice Note 15 to the Listing Rules. Accordingly, the Final Agreement and the transactions contemplated thereunder may or may not materialize. Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company.

2. UPDATE ON DEEMED DISPOSAL AND TRANSFER OF EQUITY INTEREST IN LIAONING ZHONGWANG

We refer to the announcements dated 30 October 2019 and 12 November 2019 of the Company in relation to, among other things, transfer of equity interest in Liaoning Zhongwang (the ''Announcements''). Unless otherwise indicated, terms used in this part of this announcement shall have the same meanings as those defined in the Announcements.

Termination of the Equity Transfer Agreement I and Equity Transfer Agreement II

Following the signing of the Equity Transfer Agreement I and the Equity Transfer Agreement II, while the parties have taken all necessary measures to complete the transactions contemplated thereunder, due to the outbreak of the novel coronavirus

pneumonia recently, Jiaxing Liding Changhao Equity Investment Partnership Enterprise (Limited Partnership) (嘉興力鼎昌浩股權投資合夥企業(有限合夥), ''Fund II'') and

Zibo Yingke Baiyao Pioneer Investment Partnership Enterprise (Limited Partnership) (淄博盈科百耀創業投資合夥企業(有限合夥), ''Fund III'') were not able to complete certain necessary external procedures on schedule in respect of the transactions, causing the transactions to fail to complete as expected. Having considered the whole progress of the Potential Spin-off above and the subsequent time schedule, the Company decided to terminate the relevant agreements with Fund II and Fund III.

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On 17 March 2020, Zhongwang Fabrication and Liaoning Zhongwang entered into a termination agreement with each of Fund II and Fund III (together, the ''Termination Agreements''), pursuant to which, all parties (as the case maybe) agreed to terminate the Equity Transfer Agreement I, the Equity Transfer Agreement II and the transactions contemplated thereunder (the ''Termination''), and none of the parties (as the case maybe) are obliged to perform any obligations or assume any responsibilities under the relevant equity transfer agreement and each party has no rights or claims against each other under the relevant equity transfer agreement save for return of any consideration received.

Amendment of the Shareholders' Agreement

According to the Termination Agreements and as separately agreed with National Civil- Military Integration Industry Investment Fund Co., Ltd. (國家軍民融合產業投資基金有 限責任公司, ''Fund I''), rights and obligations of Fund II and Fund III under the Shareholders' Agreement dated 30 October 2019 shall concurrently terminate on the date of the Termination Agreements, i.e. 17 March 2020.

The termination of the equity interest transfer will not impact Fund I's capital contribution to Liaoning Zhongwang. Zhongwang Fabrication and Fund I will enter into a supplemental agreement to the Shareholders' Agreement in respect of the corporate governance of Liaoning Zhongwang and rights and obligations between Liaoning Zhongwang's shareholders and the Company will publish an announcement to update its shareholders and potential investors as and when appropriate.

By order of the Board

China Zhongwang Holdings Limited

Chairman

Lu Changqing

Hong Kong, 17 March 2020

As at the date of this announcement, the Board consists of:

Executive Directors

Mr. Lu Changqing and Ms. Ma Qingmei

Non-executive Directors

Mr. Chen Yan, Mr. Lin Jun and Mr. Wei Qiang

Independent Non-executive Directors

Mr. Wong Chun Wa, Mr. Wen Xianjun, Mr. Shi Ketong and Mr. Lo Wa Kei, Roy

* For identification purpose only

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