Sinofortune Financial : Announcements and Notices -

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華 億 金 控 集 團 有 限 公 司

SINOFORTUNE FINANCIAL HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 08123) DISCLOSEABLE TRANSACTION IN CONNECTION WITH THE FORMATION OF JOINT VENTURE COMPANY JOINT VENTURE AGREEMENT

On 4 July 2017 (after trading hours), the Company and the Joint Venture Partner entered into the Joint Venture Agreement to establish the Joint Venture Company in Chongqing City, PRC to carry out the businesses of sales of motor vehicles, motor vehicle parts and motor vehicle products; sales of used motor vehicles; motor vehicles rental (excluding motor vehicles finance leasing); motor vehicles repair and maintenance; motor vehicles insurance agency; import, export and domestic trading businesses; e-commerce business; international freight forwarding services; information consultancy (excluding restricted items); and investment in industrial enterprises (specific items will be separately disclosed).

GEM LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined under the GEM Listing Rules) in relation to the Joint Venture Agreement is more than 5% but less than 25%, the Joint Venture Agreement constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 19 of the GEM Listing Rules but does not require Shareholders' approval.

The Board wishes to emphasize that the formation of the Joint Venture Company is still subject to formal approval by the relevant government authority of the PRC. Further announcement will be made by the Company on the progress of the formation of the Joint Venture Company as and when required pursuant to the GEM Listing Rules. Shareholders and potential investors of the Company are advised to exercise extreme cautions when dealing in the securities of the Company, and if they are in any doubt about their position, they should consult their professional advisors. JOINT VENTURE AGREEMENT

The Board is pleased to announce that on 4 July 2017 (after trading hours), the Company and the Joint Venture Partner entered into the Joint Venture Agreement to establish the Joint Venture Company in Chongqing City, PRC to carry out the businesses of sales of motor vehicles, motor vehicle parts and motor vehicle products; sales of used motor vehicles; motor vehicles rental (excluding motor vehicles finance leasing); motor vehicles repair and maintenance; motor vehicles insurance agency; import, export and domestic trading businesses; e-commerce business; international freight forwarding services; information consultancy (excluding restricted items); and investment in industrial enterprises (specific items will be separately disclosed).

The principal terms of the Joint Venture Agreement are summarized below: Date 4 July 2017

Parties and shareholding ratio (1) the Company (90%); and

(2) the Joint Venture Partner (10%).

Name of the Joint Venture Company

重慶盛渝泓嘉國際貿易有限公司 (transliterated as Chongqing Sheng Yu Hong Jia International Trading Company Limited)

Purpose of the Joint Venture Company

To strengthen economic cooperation through advanced and scientific management methods to open up market for economic benefits to allow the joint venture parties to achieve satisfactory economic benefits.

Registered capital of the Joint Venture Company

RMB100,000,000

Contribution to the registered capital of the Joint Venture Company

The Company shall be responsible to contribute 90% of the registered capital of the Joint Venture Company in the sum of RMB90,000,000 (equivalent to approximately HK$102,240,000) in cash and the Joint Venture Partner shall be responsible to contribute 10% of the registered capital of the Joint Venture Company in the sum of RMB10,000,000 in cash. The Company and the Joint Venture Partner shall each make their own respective contribution to the registered capital of the Joint Venture Company within one year of its establishment.

Scope of business of the Joint Venture Company

Sales of motor vehicles, motor vehicle parts and motor vehicle products; sales of used motor vehicles; motor vehicles rental (excluding motor vehicles finance leasing); motor vehicles repair and maintenance; motor vehicles insurance agency; import, export and domestic trading businesses; e-commerce business; international freight forwarding services; information consultancy (excluding restricted items); and investment in industrial enterprises (specific items will be separately disclosed).

Distribution of profits Profits of the Joint Venture Company shall be distributed to the

shareholders in accordance with the shareholding proportions of the shareholders in the Joint Venture Company.

Board composition The board of directors of the Joint Venture Company will consist

of three directors of whom the Company is entitled to appoint two directors and the Joint Venture Partner is entitled to appoint one director. The chairman of the board of the Joint Venture Company shall be appointed by the Company and shall act as the legal representative of the Joint Venture Company.

The vice chairman of the board of the Joint Venture Company shall be appointed by the Joint Venture Partner.

Each director of the Joint Venture Company shall have one vote and decisions of the board of the Joint Venture Company on matters within the power of the board of the Joint Venture Company under the Articles shall be made on a simple majority basis save that decisions of the board of the Joint Venture Company on the following matters shall be approved by the board of the Joint Venture Company unanimously:-

• amendment to the Articles;

• increase the registered capital of the Joint Venture Company; and

• merger, spinoff, change of structure, dissolution or liquidation, etc.

Term of operation of the Joint Venture Company

50 years from the issuance of the business license.

Other terms (1) If a party fails to perform the obligations stipulated in the Joint Venture Agreement and the Articles or seriously violates the provisions of the Joint Venture Agreement and/or the Articles so that the Joint Venture Company cannot operate or cannot meet the business purpose stipulated in the Joint Venture Agreement will constitute a breach of the Joint Venture Agreement and the innocent party shall have the right to terminate the Joint Venture Agreement and to claim damages from the defaulting party.

1. If a party intends to transfer all or part of its shareholding in the Joint Venture Company, it shall obtain the written approval of the other party and the other party shall have a pre-emptive right on the shareholding intended to be transferred.

2. The Joint Venture Company shall have a supervisory committee made up of three members of whom two shall be appointed by the Company and one shall be appointed by the Joint Venture Partner. The supervisory committee shall be responsible for, among other things, the monitoring of the Joint Venture Company's finance information and the supervision of the directors and senior executives of the Joint Venture Company in discharging their duties.

3. The Joint Venture Agreement shall be governed by the laws of the PRC.

The capital requirement of the Joint Venture Company and the respective capital commitment by the Company and the Joint Venture Party and the other terms of the Joint Venture Agreement were determined by arm's length negotiation between the parties to the Joint Venture Agreement taking into account the capital requirement, development potential and the prospect of the businesses to be carried out by the Joint Venture Company.

The Company will satisfy its contribution to the registered capital of the Joint Venture Company pursuant to the Joint Venture Agreement in cash through its internal resources.

INFORMATION OF THE COMPANY

The Group is principally engaged in the businesses of (i) provision of the precious metals spot trading and brokerage services in the PRC, (ii) provision of securities and futures contracts trading services in Hong Kong, (iii) trading and principal investments in the PRC and Hong Kong, (iv) research, exploration and development of the student safety network project and the electronic student card in the PRC, and (v) provision of stock information and research services through the internet network in the PRC.

INFORMATION ON THE JOINT VENTURE PARTNER

The Joint Venture Partner is a company established in the PRC whose shares are listed on Shenzhen Stock Exchange under stock code 000010 and is principal engaged in the businesses of landscaping construction, landscape design, garden conservation and green seedlings planting.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, the Joint Venture Partner and its ultimate beneficial owner are third parties independent of the Group and connected persons (as defined in the GEM Listing Rules) of the Group.

REASONS FOR AND BENEFITS DERIVED FROM ENTERING INTO THE JOINT VENTURE AGREEMENT

The Company holds the view that the entering into of the Joint Venture Agreement with the Joint Venture Partner to establish the Joint Venture Company represents an opportunity for the Group to expand its business in the sales of motor vehicles in the PRC market which is the largest motor vehicles market in the world and there is still a huge growth potential for the market given the relatively lower vehicle per capita compared with other developed markets of the world such as the United States. The Company believes that the Joint Venture Company can expand the income base of the Group and diversify its business portfolio.

Upon formation of the Joint Venture Company, the Company will own directly and effectively 90% of the equity interest of the Joint Venture Company and the Joint Venture Company will become a non-wholly owned subsidiary of the Company and the financial results of the Joint Venture Company will be consolidated into the financial statements of the Company.

The Directors consider that the terms of the Joint Venture Agreement are on normal commercial terms which are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

GEM LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined under the GEM Listing Rules) in relation to the Joint Venture Agreement is more than 5% but less than 25%, the Joint Venture Agreement constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 19 of the GEM Listing Rules but does not require Shareholders' approval.

The Board wishes to emphasize that the formation of the Joint Venture Company is still subject to formal approval by the relevant government authority of the PRC. Further announcement will be made by the Company on the progress of the formation of the Joint Venture Company as and when required pursuant to the GEM Listing Rules. Shareholders and potential investors of the Company are advised to exercise extreme cautions when dealing in the securities of the Company, and if they are in any doubt about their position, they should consult their professional advisors. DEFINITIONS

In this announcement, the following expressions will, unless the context requires otherwise, have the following meanings:

"Articles" the articles of association of the Joint Venture Company

"Board" the board of Directors

"Company" Sinofortune Financial Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on GEM

"Director" the director(s) of the Company

"GEM" the Growth Enterprise Market of the Stock Exchange "GEM Listing Rules" the Rules Governing the Listing of Securities on GEM "Group" the Company and its subsidiaries

"HK$" Hong Kong dollars, the lawful currency of Hong Kong

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

"Joint Venture Agreement" the joint venture agreement entered into between the Company and the

Joint Venture Partner on 4 July 2017

"Joint Venture Company" the sino-foreign joint venture limited liability company, being a special

purpose vehicle to be established in Chongqing City, PRC in accordance with the terms as set out in the Joint Venture Agreement

"Joint Venture Partner" 深圳美麗生態股份有限公司 (transliterated as Shenzhen Ecobeauty

Co., Ltd), a limited liability company established in the PRC whose shares are listed on Shenzhen Stock Exchange under stock code 000010

"PRC" the People's Republic of China

"RMB" Renminbi, the lawful currency of the PRC

"Shareholders" the shareholders of the Company

"Shares" the ordinary share(s) of HK$0.01 each in the share capital of the Company

"Stock Exchange" The Stock Exchange of Hong Kong Limited "%" per cent

For the purpose of this announcement, unless otherwise specified, conversion of Renminbi, the lawful currency of the People's Republic of China, into Hong Kong dollars, the lawful currency of Hong Kong, is based on the approximate exchange rate of RMB1.00 to HK$1.136.

By Order of the Board

Sinofortune Financial Holdings Limited Wang Jiawei

Chairman

Hong Kong, 4 July 2017

As of the date of this announcement, the executive Directors are Mr. Wang Jiawei and Ms. Lai Yuk Mui, the non-executive Directors are Mr. Liu Runtong and Mr. James Beeland Rogers Jr. and the independent non-executive Directors are Professor Zhang Benzheng, Mr. Li Jianxing and Professor Chen Shu Wen.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the "Latest Company Announcements" page of the website of the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited at http://www.hkgem.com for at least 7 days from the date of its posting and on the Company's website at http://www.firstchina.hk.