Hygeia Healthcare : CONNECTED TRANSACTION FORMATION OF JOINT VENTURE IN RELATION TO THE FOR-PROFIT REFORM OF KAIYUAN JIEHUA HOSPITAL

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Hygeia Healthcare Holdings Co., Limited

海 吉 亞 醫 療 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6078)

CONNECTED TRANSACTION

FORMATION OF JOINT VENTURE IN RELATION TO

THE FOR-PROFIT REFORM OF KAIYUAN JIEHUA HOSPITAL

FORMATION OF JOINT VENTURE

On April 16, 2021, Gamma Star Tech, a wholly-owned subsidiary of the Company, entered into the JV Agreement with Xiangshang Investment in relation to the proposed formation of the Joint Venture. Pursuant to the JV Agreement, Gamma Star Tech and Xiangshang Investment agreed to make a capital contribution of RMB5,000,000 and RMB2,142,858, respectively, representing 70% and 30% of the total registered capital of the Joint Venture, respectively. Upon its formation, the Joint Venture will be held by Gamma Star Tech and Xiangshang Investment as to 70% and 30%, respectively, and will become a non-wholly- owned subsidiary of the Company.

As of the date of this announcement, the organizer's interest (舉辦人權益) of Kaiyuan Jiehua Hospital is held by Gamma Star Tech and Xiangshang Investment as to 70% and 30%, respectively. Kaiyuan Jiehua Hospital intends to conduct a for-profit reform to transform from a not-for-profit hospital to a for-profit hospital. The formation of the Joint Venture by Gamma Star Tech and Xiangshang Investment with the same shareholding percentage as that of their respective organizer's interest in Kaiyuan Jiehua Hospital is one of the steps towards the for-profit reform of Kaiyuan Jiehua Hospital. The Joint Venture will be the legal entity to operate the for-profit hospital.

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LISTING RULES IMPLICATIONS

As of the date of this announcement, Xiangshang Investment is owned by Mr. Zhu, a non-executive Director, the vice chairman of the Board and a Controlling Shareholder, and Ms. Zhu, a Controlling Shareholder, as to 40% and 60%, respectively, and therefore, Xiangshang Investment is regarded as a connected person of the Company. As such, the entering into of the JV Agreement constitutes a connected transaction of the Company.

As the highest applicable percentage ratio (as defined in the Listing Rules) for the transaction contemplated under the JV Agreement exceeds 0.1% but less than 5%, the entering into of the JV Agreement is subject to the reporting and announcement requirements, but exempt from the independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

The Joint Venture, a non-wholly-owned subsidiary of the Company upon its formation, will be the legal entity to operate the for-profit hospital, and the Kaiyuan Cooperation Agreement and the Kaiyuan Hospital Management Agreement and the continuing connected transactions contemplated thereunder will be terminated. The Company will make further announcement in accordance with all applicable requirements of the Listing Rules as and when appropriate.

INTRODUCTION

The Board announces that on April 16, 2021, Gamma Star Tech, a wholly-owned subsidiary of the Company, entered into the JV Agreement with Xiangshang Investment in relation to the proposed formation of the Joint Venture. Pursuant to the JV Agreement, Gamma Star Tech and Xiangshang Investment agreed to make a capital contribution of RMB5,000,000 and RMB2,142,858, respectively, representing 70% and 30% of the total registered capital of the Joint Venture, respectively. Upon its formation, the Joint Venture will be held by Gamma Star Tech and Xiangshang Investment as to 70% and 30%, respectively, and will become a non- wholly-owned subsidiary of the Company.

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THE JV AGREEMENT

The principal terms of the JV Agreement are summarized below:

Date	:	April 16, 2021
Intended location of	: Kaiyuan City, Honghe Hani and Yi Autonomous
the Joint Venture		Prefecture, Yunnan Province
Proposed name of	: Kaiyuan Jiehua Hospital Co., Ltd. (開遠解化醫院有限公
the Joint Venture		司)
Parties	:	(1)	Gamma Star Tech, a wholly-owned subsidiary of the
			Company; and
		(2)	Xiangshang Investment.
Total registered capital	:	RMB7,142,858
Capital contribution	: The total registered capital will be contributed as follows:
		(1)	70% (amounting to RMB5,000,000 in the form of
			cash) by Gamma Star Tech; and
		(2)	30% (amounting to RMB2,142,858 in the form of
			cash) by Xiangshang Investment.

The cash contribution by Gamma Star Tech will be funded by the internal resources of the Group. The amount of total registered capital was determined based on the organizer's funding (舉辦資金) of Kaiyuan Jiehua Hospital, and will be contributed by Gamma Star Tech and Xiangshang Investment in accordance with the articles of association of the Joint Venture.

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Purpose of the Joint	:	As of the date of this announcement, the organizer's
Venture		interest (舉辦人權益) of Kaiyuan Jiehua Hospital is held
		by Gamma Star Tech and Xiangshang Investment as to
		70% and 30%, respectively. Kaiyuan Jiehua Hospital
		intends to conduct a for-profit reform to transform from
		a not-for-profit hospital to a for-profit hospital. The
		formation of the Joint Venture by Gamma Star Tech
		and Xiangshang Investment with the same shareholding
		percentage as that of their respective organizer's interest
		in Kaiyuan Jiehua Hospital is one of the steps towards the
		for-profit reform of Kaiyuan Jiehua Hospital. The Joint
		Venture will be the legal entity to operate the for-profit
		hospital.
Corporate governance	:	There will be no board of directors but an executive
		director appointed by Gamma Star Tech to the Joint
		Venture.
Proposed term of business	:	Long term
of the Joint Venture

REASONS FOR AND BENEFITS OF THE FORMATION OF THE JOINT VENTURE

Yunnan Province is among the regions with high incidence of lung cancer. The Company envisages the oncology healthcare market potential in Kaiyuan City and would like to further develop the oncology business of Kaiyuan Jiehua Hospital in order to better serve the local oncology patients. The for-profit reform of the Kaiyuan Jiehua Hospital could allow capital investment in the hospital by the Company, enhance the hospital's oncology treatment and service capabilities for the patients, unleash more potential for future business developments of Kaiyuan Jiehua Hospital and promote the strategic layout of the Group.

The Directors (including the independent non-executive Directors) consider that the terms of the JV Agreement are fair and reasonable and on normal commercial terms and in the ordinary and usual course of business of the Group, and the formation of the Joint Venture is in the interests of the Company and its Shareholders as a whole.

Mr. Zhu and Mr. Ren Ai (the spouse of Ms. Zhu) is considered to have a material interest in the JV Agreement, and therefore, they have abstained from voting on the relevant resolutions approving the entering into of the JV Agreement. None of the other Directors has any material interest in the transactions contemplated thereunder.

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LISTING RULES IMPLICATIONS

As of the date of this announcement, Xiangshang Investment is owned by Mr. Zhu, a non- executive Director, the vice chairman of the Board and a Controlling Shareholder, and Ms. Zhu, a Controlling Shareholder, as to 40% and 60%, respectively, and therefore, Xiangshang Investment is regarded as a connected person of the Company. As such, the entering into of the JV Agreement constitutes a connected transaction of the Company.

As the highest applicable percentage ratio (as defined in the Listing Rules) for the transaction contemplated under the JV Agreement exceeds 0.1% but less than 5%, the entering into of the JV Agreement is subject to the reporting and announcement requirements, but exempt from the independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

The Joint Venture, a non-wholly-owned subsidiary of the Company upon its formation, will be the legal entity to operate the for-profit hospital, and the Kaiyuan Cooperation Agreement and the Kaiyuan Hospital Management Agreement and the continuing connected transactions contemplated thereunder will be terminated. The Company will make further announcement in accordance with all applicable requirements of the Listing Rules as and when appropriate.

PARTIES INFORMATION

As of December 31, 2020, the Group operated or managed a network of 10 oncology-focused hospitals through its direct equity ownership or management rights, spanning across seven cities in six provinces in China. In addition, as of December 31, 2020, the Group provided services to 17 hospital partners (including the three private not-for-profit hospitals managed by the Group) in connection with their radiotherapy centers, which were located in nine provinces in China.

Xiangshang Investment is owned by Mr. Zhu and Ms. Zhu as to 40% and 60%, respectively, and is an investment holding company of Mr. Zhu and Ms. Zhu.

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DEFINITIONS
"Board"	the board of directors of the Company
"Chairman"	the Chairman of the Board
"China" or the "PRC"	the People's Republic of China, but for the purpose of
	this announcement and for geographical reference only,
	references herein to "China" and the "PRC" do not apply to
	Hong Kong, Macau Special Administrative Region of the
	PRC and Taiwan
"Company"	Hygeia Healthcare Holdings Co., Limited (海吉亞醫療控
	股有限公司), an exempted company with limited liability
	incorporated under the laws of Cayman Islands on September
	12, 2018, the Shares of which are listed on the Main Board
	of the Stock Exchange
"Controlling Shareholder(s)"	has the meaning ascribed thereto under the Listing Rules
	and, unless the context otherwise requires, refers to Mr.
	Zhu, Ms. Zhu, Century River Investment Holdings Limited,
	Century River Holdings Limited, Red Palm Investment
	Holdings Limited, Red Palm Holdings Limited and Amber
	Tree Holdings Limited
"Director(s)"	director(s) of the Company
"Group"	the Company together with its subsidiaries
"Gamma Star Tech"	Shanghai Gamma Star Technology Development Co., Ltd.
	(上海伽瑪星科技發展有限公司), a limited liability company
	established in the PRC on May 20, 2004 and a wholly-owned
	subsidiary of the Company
"Handan Renhe Hospital"	Handan Renhe Hospital (邯鄲仁和醫院), a private not-for-
	profit hospital established under the laws of the PRC which
	the Group acquired on July 31, 2011 and one of the Managed
	Hospitals
"Handan Zhaotian Hospital"	Handan Zhaotian Orthopedics Hospital (邯鄲兆田骨科醫院),
	a private not-for-profit hospital established under the laws of
	the PRC which the Group acquired on August 27, 2015 and
	one of the Managed Hospitals
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC

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"Joint Venture"	the joint venture to be formed under the JV Agreement, the
	proposed name of which is Kaiyuan Jiehua Hospital Co.,
	Ltd. (開遠解化醫院有限公司), a limited liability company
	incorporated in the PRC
"JV Agreement"	the joint venture agreement entered into among Gamma
	Star Tech and Xiangshang Investment on April 16, 2021,
	with respect to the proposed formation of the Joint Venture,
	details of which are disclosed in this announcement
"Kaiyuan Cooperation	the cooperation agreement entered into by Gamma Star Tech
Agreement"	with Kaiyuan Jiehua Hospital in December 2014, pursuant
	to which the Group provides radiotherapy center services to
	Kaiyuan Jiehua Hospital in exchange for service fees
"Kaiyuan Hospital	the hospital management agreement entered into by Gamma
Management Agreement"	Star Tech with Kaiyuan Jiehua Hospital in November
	2012, pursuant to which the Group is entitled to receive
	management service fees calculated as a fixed percentage
	of the revenue of Kaiyuan Jiehua Hospital in return for the
	daily hospital operation management services provided and
	to be provided by the Group
"Kaiyuan Jiehua Hospital"	Kaiyuan Jiehua Hospital (開遠解化醫院), a private not-for-
	profit hospital established under the laws of the PRC which
	the Group acquired on November 12, 2012 and one of the
	Managed Hospitals of the Group, the organizer's interest
	of which is held by Gamma Star Tech and Xiangshang
	Investment as to 70% and 30%, respectively
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange, as amended or supplemented from time to time
"Main Board"	the stock exchange (excluding the option market) operated
	by the Stock Exchange which is independent from and
	operates in parallel with the GEM of the Stock Exchange
"Managed Hospitals"	Kaiyuan Jiehua Hospital, Handan Renhe Hospital and
	Handan Zhaotian Hospital
"Mr. Zhu"	Mr. Zhu Yiwen (朱義文), father of Ms. Zhu, the founder,
	non-executive Director and vice chairman of the Group and
	one of the Controlling Shareholders
"Ms. Zhu"	Ms. Zhu Jianqiao (朱劍喬), daughter of Mr. Zhu and one of
	the Controlling Shareholders
"RMB"	the lawful currency of the PRC

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"Share(s)"	ordinary share(s) in the share capital of the Company with
	nominal value of US$0.00001 each
"Shareholder(s)"	holder(s) of the Shares
"Stock Exchange"	the Stock Exchange of Hong Kong Limited
"US$"	the lawful currency of the United States of America
"Xiangshang Investment"	Shanghai Xiangshang Investment Development Co., Ltd.
	(上海向上投資發展有限公司), a limited liability company
	established in the PRC on September 1, 2015 and owned by
	Mr. Zhu and Ms. Zhu as to 40% and 60%, respectively
"%"	per cent
	By order of the Board
	Hygeia Healthcare Holdings Co., Limited
	Mr. Fang Min
	Chairman
Hong Kong, April 16, 2021

As of the date of this announcement, the Board comprises Mr. Fang Min as chairman and non-executive Director, Mr. Zhu Yiwen as vice chairman and non-executive Director, Ms. Cheng Huanhuan, Mr. Ren Ai, Mr. Zhang Wenshan and Ms. Jiang Hui as executive Directors, and Mr. Liu Yanqun, Mr. Chen Penghui and Mr. Ye Changqing as independent non-executive Directors.

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