Guangdong Yueyun Transportation : CONNECTED TRANSACTION - DISPOSAL OF 100% OF EQUITY INTEREST IN YUEYUN LANGRI PROPERTY

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廣東粵運交通股份有限公司

Guangdong Yueyun Transportation Company Limited*

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 03399)

CONNECTED TRANSACTION

DISPOSAL OF 100% OF EQUITY INTEREST IN YUEYUN LANGRI

PROPERTY

THE EQUITY TRANSFER AGREEMENT

The Board is pleased to announce that, on 12 December 2019, Guangdong Yueyun Langri (a non-wholly owned subsidiary of the Company), and Yueyun Investment Management (a wholly-owned subsidiary of GCGC), entered into the Equity Transfer Agreement, pursuant to which the Company has agreed to dispose of, and Yueyun Investment Management has agreed to acquire, 100% of the equity interest in the Target Company, following completion of the public tender on Guangdong United Assets and Equity Exchange.

LISTING RULES IMPLICATIONS

As at the date of this announcement, GCGC is the controlling shareholder of the Company as it, directly or indirectly, holds approximately 74.12% of the total issued share capital of the Company. Therefore, GCGC is a connected person of the Company under the Listing Rules. Yueyun Investment Management is a wholly-owned subsidiary of GCGC and therefore is a connected person of the Company.

As the highest applicable percentage ratios calculated in accordance with the Listing Rules in respect of the Disposal exceed 0.1% but is less than 5%, the Disposal constitutes a connected transaction of the Company which is subject to the reporting and announcement requirements but is exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

INTRODUCTION

The Board is pleased to announce that, on 12 December 2019, Guangdong Yueyun Langri (a non-wholly owned subsidiary of the Company), and Yueyun Investment Management (a wholly-owned subsidiary of GCGC), entered into the Equity Transfer Agreement, pursuant to which the Company has agreed to dispose of, and Yueyun Investment Management has agreed to acquire, 100% of the equity interest in the Target Company, following completion of the public tender on Guangdong United Assets and Equity Exchange.

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THE EQUITY TRANSFER AGREEMENT

The principal terms of the Equity Transfer Agreement are as follows:

Date

12 December 2019

Parties

1. Guangdong Yueyun Langri (as seller); and
2. Yueyun Investment Management (as purchaser).

Subject Matter

Pursuant to the Equity Transfer Agreement, Guangdong Yueyun Langri has agreed to dispose of, and Yueyun Investment Management has agreed to acquire, 100% of the equity interest in the Target Company, subject to the terms and conditions thereof.

Consideration

Pursuant to the Equity Transfer Agreement, the Consideration for the Disposal is RMB28,904,310, which shall be paid to Guangdong Yueyun Langri by Guangdong United Assets and Equity Exchange within 3 business days after its receipt from Yueyun Investment Management of:

1. the earnest money in the amount of RMB9,630,000, paid by Yueyun Investment Management to Guangdong United Assets and Equity Exchange for participation in the tender process; and
2. the remaining balance in the amount of RMB19,274,310, payable by Yueyun Investment Management in one lump sum through a designated settlement account of Guangdong United Assets and Equity Exchange within 5 business days after the date of the Equity Transfer Agreement.

The Consideration was determined through public tender on Guangdong United Assets and Equity Exchange in accordance with the applicable rules and procedures. The minimum tender price of the public tender was RMB28,904,310, which was determined with reference to (i) the audited net asset value of the Target Company as at 31 December 2018 of approximately RMB21,032,414.90; and (iii) the appraised value of the total shareholders' equity of the Target Company as at the Valuation Date (being 30 June 2018) of approximately RMB32,115,900 determined based on asset-based approach and as set out in the Valuation Report.

Completion

Completion shall take place upon completion of the registration of change in respect of the Disposal with the relevant industry and commerce administration authority in the PRC, which shall be completed within 30 days from the date of the Equity Transfer Agreement.

Upon Completion, Yueyun Investment Management shall be entitled to the profits or losses of the Target Company for the period between the Valuation Date and the date of the Completion.

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FINANCIAL EFFECT OF THE DISPOSAL

As at the date of this announcement, Guangdong Yueyun Langri is held by the Company as to 51% and 100% of the equity interest in the Target Company is held by Guangdong Yueyun Langri. Upon Completion, Guangdong Yueyun Langri will cease to have an interest in the Target Company and therefore, the Target Company will cease to be an indirect non-wholly owned subsidiary of the Company.

It is estimated that the Group will recognise a gain of approximately RMB7,953,200 from the Disposal, which is calculated based on the difference between (i) the Consideration; and (ii) the carrying value of 100% of the equity interest held by Guangdong Yueyun Langri in the Target Company.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Group is principally engaged in the provision of travel service. The principal businesses of the Target Company, being property development and property-related businesses, are not in line with the existing principal businesses and future development plan of the Group. The Disposal enables the Group to focus on its principal businesses and it is estimated that the Group will also realise a gain on the Disposal.

The Board (including the independent non-executive Directors) considers that the terms of the Equity Transfer Agreement and the transactions contemplated thereunder are on normal commercial terms which are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

INFORMATION ON THE GROUP

The Company was established under the laws of the PRC as a joint stock limited company with limited liability and its H shares are listed on the Stock Exchange. The Group is principally engaged in the provision of travel service.

INFORMATION ON GUANGDONG YUEYUN LANGRI

Guangdong Yueyun Langri is a company established under the laws of the PRC with limited liability and is an indirect non-wholly owned subsidiary of the Company. It is principally engaged in the provision of passenger transportation service, charter coach, terminal service and other industry-related services.

INFORMATION ON YUEYUN INVESTMENT MANAGEMENT

Yueyun Investment Management is a company established under the laws of the PRC with limited liability and a wholly-owned subsidiary of GCGC. It is principally engaged in project investment management and consultation.

INFORMATION ON THE TARGET COMPANY

The Target Company is a company established under the laws of the PRC with limited liability and a wholly-owned subsidiary of Guangdong Yueyun Langri. It is principally engaged in property development and operation, provision of property agency service and property management service, property leasing, sale and leasing of construction and building materials and landscaping service.

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Based on the financial statements of the Target Company prepared in accordance with the China Accounting Standard for Business Enterprises, the financial information of the Target Company for the two years ended 31 December 2017 and 2018 were approximately as follows:

For the year ended 31

December

2017 2018

(audited) (audited)

(RMB) (RMB)

Revenue	0	0
Profit/(loss) before taxation	(722,127)	(637,413)
Profit/(Loss) after taxation	(722,127)	(637,413)

The audited net asset value of the Target Company as at 31 December 2018 was approximately RMB21,032,414.90.

According to the Valuation Report, the appraised value of the total shareholders' equity of the Target Company as at the Valuation Date, being 30 June 2018, was approximately RMB32,115,900, which was determined based on the asset-based approach in accordance with the relevant PRC laws and regulations.

LISTING RULES IMPLICATIONS

As at the date of this announcement, GCGC is the controlling shareholder of the Company as it, directly or indirectly, holds approximately 74.12% of the total issued share capital of the Company. Therefore, GCGC is a connected person of the Company under the Listing Rules. Yueyun Investment Management is a wholly-owned subsidiary of GCGC and therefore is a connected person of the Company.

As the highest applicable percentage ratios calculated in accordance with the Listing Rules in respect of the Disposal exceed 0.1% but is less than 5%, the Disposal constitutes a connected transaction of the Company which is subject to the reporting and announcement requirements but is exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

As Mr. Chen Chuxuan and Mr. Chen Min, non-executive Directors, are the deputy chief accountant and the head of the strategic development department and the head of the legal affairs department of GCGC, respectively, they are considered to have a material interest in, and they have abstained from voting on, the resolution passed by the Board to approve the Equity Transfer Agreement and the transactions contemplated thereunder. Save as disclosed, none of the Directors has material interest in, or is required to abstain from voting on such Board resolution.

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DEFINITIONS

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

"Board"

"Company"

"Completion"

"connected person(s)"

"connected transaction(s)"

"Consideration"

"controlling shareholder"

"Director(s)"

"Disposal"

"Equity Transfer Agreement"

"GCGC"

"Group"

"Guangdong Province"

the board of directors of the Company

Guangdong Yueyun Transportation Company Limited* (廣 東粵運交通股份有限公司) (Stock Code: 03399), a joint

stock limited company incorporated under the laws of the PRC with limited liability, the H Shares of which are listed on the Main Board of the Stock Exchange

the completion of the Disposal in accordance with the terms and conditions of the Equity Transfer Agreement

has the meaning ascribed to it under the Listing Rules

has the meaning ascribed to it under the Listing Rules

the consideration in the amount of RMB28,904,310 payable by Yueyun Investment Management to Guangdong Yueyun Langri for the Disposal under the Equity Transfer Agreement

has the meaning ascribed to it under the Listing Rules

the director(s) of the Company

the disposal of 100% of the equity interest in the Target Company by Guangdong Yueyun Langri to Yueyun Investment Management pursuant to the Equity Transfer Agreement

the equity transfer agreement dated 12 December 2019 entered into by Guangdong Yueyun Langri and Yueyun Investment Management in relation to the Disposal

Guangdong Provincial Communication Group Company Limited* ( 廣東省交通集團有限公司), a state - owned

enterprise established in the PRC and a controlling shareholder of the Company

the Company and its subsidiaries

the Guangdong Province of the PRC

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"Guangdong United Assets

and Equity Exchange"

"Guangdong Yueyun Langri"

"H Share(s)"

"Hong Kong"

"Listing Rules"

"PRC"

Guangdong United Assets and Equity Exchange Co., Ltd.* (廣東聯合產權交易中心有限公司), a company established

under the laws of the PRC with limited liability

Guangdong Yueyun Langri Co., Ltd.* (廣東粵運朗日股 份有限公司), a company established under the laws of the PRC with limited liability and a non-wholly owned subsidiary of the Company

the overseas listed foreign share(s) in the capital of the Company with a RMB-denominated par value of RMB1.00 each which are subscribed for and traded in Hong Kong dollars, and they are listed on the Main Board of the Stock Exchange

the Hong Kong Special Administrative Region of the PRC

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

the People's Republic of China, which for the purpose of this announcement, excluding Hong Kong, the Macau Special Administration 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
"Target Company" or	Yang Jiang City Yueyun Langri Property Development
"Yueyun Langri Property"	Company Limited* (陽江市粵運朗日房地產開發有限公
	司), a company established under the laws of the PRC with
	limited liability, a wholly-owned subsidiary of Guangdong
	Yueyun Langri and an indirect non-wholly owned subsidiary
	of the Company as at the date of this announcement
"Valuation Date"	30 June 2018

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"Valuation Report"

"Yueyun Investment Management"

"%"

Guangzhou, the PRC

12 December 2019

the valuation report dated 24 July 2018 prepared by

Guangdong Union Trust Evaluation Co., Ltd.* (廣東聯信資 產評估土地房地產估價有限公司), an independent valuer,

in respect of the Target Company, with the valuation date being 30 June 2018

Guangzhou Yueyun Investment Management Company Limited* ( 廣州粵運投資管理有限公司), a company

established in the PRC with limited liability and a wholly- owned subsidiary of GCGC

per cent

By order of the Board

Guangdong Yueyun Transportation Company Limited

Xuan Zongmin

Chairman of the Board

As at the date of this announcement, the Board comprises Mr. Xuan Zongmin, Mr. Tang Yinghai, Mr. Yao Hanxiong, Mr. Wen Wu and Mr. Zhang Xian as executive directors of the Company, Mr. Chen Min and Mr. Chen Chuxuan as non-executive directors of the Company, and Mr. Jin Wenzhou, Ms. Lu Zhenghua, Ms. Wen Huiying and Mr. Zhan Xiaotong as independent non-executive directors of the Company.

• For identification purpose only

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