The board of directors of the Tat Hong Equipment Service Co., Ltd. announced that on 6 December 2021, the Company entered into a non-legally binding memorandum of understanding (the MOU) with IFS Capital Limited (IFS and collectively with the Company, the Parties), in relation to the proposed formation of a joint venture company (the JV Company) to provide tower cranes financing in the People's Republic of China (the PRC). Principal Terms of The MOU: Parties The Company, a tower crane service provider for one-stop tower crane solution services from consultation, technical design, commissioning, construction to after-sales services primarily to Chinese Special-tier and Tier-1 EPC contractors. IFS, which principally engages in the provision of commercial finance services including hire-purchase, leasing, factoring, loans, government-assisted schemes and trade/export finance.

Mr. Lim Hua Min (Mr. Lim) is a director and ultimate beneficial owner of the controlling stake of IFS. As at the date of this announcement, Phillip Capital (HK) Limited (Phillip Capital) owns approximately 5.55% of the issued capital of the Company, and Phillip Capital is owned as to 85.0% by Mr. Lim. By virtue of the Securities and Future Ordinance (Chapter 571 of the Laws of Hong Kong), Mr. Lim is deemed to be interested in the same number of shares of the Company in which Phillip Capital is interested.

Save as disclosed above and as at the date of this announcement, to the best of the Directors' knowledge, information and belief, and after making all reasonable enquiries, IFS and its ultimate beneficial owners are independent third parties of the Company and its connected persons (as defined under the Rules Governing the Listing of Securities of The Stock Exchange of Hong Kong Limited (the Listing Rules)). Purpose of the JV Company: The JV Company is proposed to be set up for the purpose of engaging in the business of providing tower cranes financing in the PRC. Equity interest ratios: Subject to any definitive agreements which the Parties may subsequently enter into from time to time (the Definitive Agreements), the Parties shall procure the formation of a new limited liability company under the laws of the PRC as the JV Company, and registered capital of the JV Company will be owned as to 40% by the Company, and as to 60% by IFS.

Reasons for And Benefits Of Entering Into The MOU: The Directors consider that entering into the MOU in respect of the proposed formation of the JV Company allows the Group to expand the tower crane financial leasing market in the PRC. The Directors believe that the entering into the MOU is in the interests of the Company and its shareholders as a whole, as the transactions contemplated under the MOU, if materialized, would enable the Group to enhance the tower crane financial leasing business and to broaden its income stream. The Directors also believe that by leveraging on the expertise of IFS in financial leasing, the cooperation with IFS will advance the Group's existing service portfolio and provide new growth opportunities of the Group in the future, as well as further strengthen the Group's market position in tower crane service market.