Skyworth : DISCLOSEABLE TRANSACTION - DISPOSAL OF EQUITY INTEREST IN THE TARGET COMPANY

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SKYWORTH GROUP LIMITED

創 維 集 團 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 00751)

DISCLOSEABLE TRANSACTION

DISPOSAL OF EQUITY INTEREST IN THE TARGET COMPANY

THE DISPOSAL

The Board is pleased to announce that on 16 April 2021, the Vendor, an indirect wholly-owned subsidiary of the Company, entered into the Disposal Agreement with the Purchaser, pursuant to which the Vendor has agreed to sell, and the Purchaser has agreed to acquire, the Sale Shares, which represents 10% of the equity interest in the Target Company, at a cash consideration of RMB63.8 million.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Disposal, when aggregated with the Previous Disposals, is more than 5% but less than 25%, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under the Listing Rules.

THE DISPOSAL

The Board is pleased to announce that on 16 April 2021, the Vendor, an indirect wholly-owned subsidiary of the Company, entered into the Disposal Agreement with the Purchaser, pursuant to which the Vendor has agreed to sell, and the Purchaser has agreed to acquire, the Sale Shares, which represents 10% of the equity interest in the Target Company, at a cash consideration of RMB63.8 million.

As at the date of this announcement, the Company holds an indirect 10% equity interest in Target Company, which is accounted for as a financial asset at fair value through profit or loss in the consolidated financial statements of the Company. Upon Completion, the Company will cease to have any equity interest in the Target Company.

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The principal terms of the Disposal Agreement are set out as follows:

Date:	16 April 2021
Vendor:	創 維 集 團 建 設 發 展 有 限 公 司 (Skyworth Group	Construction
	Development Co. Ltd.*), an indirect wholly-owned subsidiary of the
	Company.
Purchaser:	科學城( 廣州) 投資集團有限公司 (Science City	(Guangzhou)
	Investment Group Co. Ltd.*), a company established under the laws of
	the PRC which is wholly-owned by 廣州經濟技術開發區管理委員
	會 (Guangzhou Hi-Tech Industry Development Zone Administration
	Committee*), an organization under the PRC government.
	To the best of the Directors' knowledge, information and belief having
	made all reasonable enquiries, the Purchaser and its ultimate beneficial
	owners are Independent Third Parties.
Subject Matter:	10% equity interest in 廣州創維電子有限公司 (Guangzhou Skyworth
	Electronics Co., Ltd.*) which is a company established under the laws
	of the PRC. Pursuant to the Disposal Agreement, the application for
	change in shareholders in Target Company is required to be made with
	the relevant administration for industry and commerce within 10 days
	after the date of the Disposal Agreement.
	Upon Completion, the Company will cease to hold any equity interest
	in the Target Company.
	The unaudited net asset value of Target Company as at 31 December
	2020 amounted to approximately RMB490.82 million.
	The net loss before and after taxation of Target Company for the years
	ended 31 December 2019 and 31 December 2020 are as follows:-
					Financial year ended
					31 December 2020	31 December 2019
					Approx. RMB	Approx. RMB
					million		million
					(unaudited)		(audited)
	Net	loss	before		0.91		2.73
	taxation
	Net	loss	after		0.91		2.73
	taxation

Conditions precedent: Completion under the Disposal Agreement is unconditional.

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Consideration:	The Consideration of RMB63.8 million under Disposal Agreement is
	to be paid in cash in two instalments as follows:-
	(i)	50% of the Consideration is payable by the Purchaser within 10
		business days after the relevant administration for industry and
		commerce in the PRC acknowledging receipt of application
		regarding the change of ownership in the Sale Shares; and
	(ii)	50% of the Consideration is payable by the Purchaser within
		10 business days after the date of Completion (being the date
		on which the transfer of the Sale Shares is approved by the
		relevant administration for industry and commerce in the
		PRC).
	The Consideration underlying the Disposal Agreement has been
	negotiated between the Vendor and the Purchaser on an arm's length
	basis with reference to the carrying value of the Target Company in
	the Company's consolidated management accounts as at 31 March
	2021, and represents a premium of 29.9% to the net asset value of the
	Targets as at 31 December 2020 of RMB49.1 million.
Security:	The Vendor's obligations under the Disposal Agreement will also be
	guaranteed by the Guarantor by way of a separate corporate guarantee.

INFORMATION ON THE PURCHASER

The Purchaser, namely 科學城(廣州)投資集團有限公司 (Science City (Guangzhou) Investment Group Co. Ltd.*), is a company established under the laws of the PRC which is wholly-owned by 廣 州經濟技術開發區管理委員會 (Guangzhou Hi-Tech Industry Development Zone Administration Committee*), an organization of the PRC government.

According to information available to the Company, the Purchaser is principally engaged in the provision of services in project investments and construction and infrastructure.

FINANCIAL IMPACT OF THE DISPOSAL

Based on (i) the carrying value of Target Company in the Company's consolidated management accounts as at 31 March 2021 of approximately RMB63.8 million and (ii) the consideration under the Disposal Agreement, it is expected that the Company will not record any gain or loss in respect of the Disposal, subject to audit. The net proceeds from the Disposal are expected to be approximately RMB60.4 million, which are expected to be applied towards funding the Group's other investments in its ordinary course of business.

Upon Completion, the Company will cease to hold any equity interest in the Target Company.

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REASONS FOR AND BENEFITS OF THE DISPOSAL

The Company and the Guarantor are investment holding companies. The Vendor is principally engaged in provision of management and consultation services in construction projects and interior / exterior fitting-out projects. The Group is principally engaged in manufacturing and selling smart TV systems, home access systems, smart white appliances, internet value-added services, property development and property holding.

The Disposal represents a complete divestment by the Group of its investment in the Target Company as part of the Group's continual effort in optimizing its investment asset portfolio. In light of the Target Company's financial performance in recent years, the Directors are of the view that a divestment from the Target Company will allow the Group to redeploy the proceeds from the Disposal to enhance the Group's liquidity position and provide funding for the Group's other investments. Accordingly, the Directors are of the view that the Disposal is in the interests of the Company and its shareholders as a whole, and the terms of the Disposal Agreement are fair and reasonable.

LISTING RULES IMPLICATION

As one or more of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Disposal, when aggregated with the Previous Disposals, is more than 5% but less than 25%, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under the Listing Rules.

DEFINITIONS

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

"Board"	the board of Directors;
"Company"	Skyworth Group Limited, a company incorporated in Bermuda with limited
	liability and the ordinary shares of which are listed on the main board of the
	Stock Exchange (stock code: 00751);
"Completion"	the completion of the Disposal pursuant to the terms and conditions of the
	Disposal Agreement;
"connected person"	has the meaning ascribed to it under the Listing Rules;
"Consideration"	the consideration for the sale and purchase of the Sale Shares pursuant to the
	terms of the Disposal Agreement;
"Directors"	the directors of the Company;
"Disposal"	the disposal of the Sale Shares in the Target Company by the Vendor as
	contemplated under the Disposal Agreement;
"Disposal Agreement"	the sale and purchase agreement dated 16 April 2021 entered into between
	the Vendor and the Purchaser in respect of the sale and purchase of Sale
	Shares;
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"Group"	the Company and its subsidiaries;
"Guarantor"	創維集團有限公司(Chuangwei Group Co., Ltd.*), an indirect wholly-
	owned subsidiary of the Company established under the laws of the PRC and
	is the guarantor in respect of the Vendor's obligations under the Disposal
	Agreement;
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC;
"Independent Third	person(s) who are independent from the Company and its connected persons;
Party(ies)"
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange, as amended from time to time;
"PRC"	the People's Republic of China;
"Previous Disposals"	the disposal by the Vendor of 90% equity interest in the Target Company
	and 90% equity interest in 廣州創維平面顯示科技有限公司 (Guangzhou
	Flat Display Technology Co., Ltd.*), a company established under the laws
	of the PRC, details of which are set out in the Company's announcement
	dated 12 June 2020;
"Purchaser"	科學城(廣州)投資集團有限公司 (Science City (Guangzhou) Investment
	Group Co. Ltd.*), a company established under the laws of the PRC and is
	an Independent Third Party;
"RMB"	Renminbi, the lawful currency of the PRC;
"Sale Shares"	10% equity interest in Target Company as held by the Vendor, being the
	subject of the transactions underlying the Disposal Agreement;
"Share(s)"	ordinary share(s) of HK$0.10 each in the share capital of the Company;
"Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"Target Company"	廣州創維電子有限公司 (Guangzhou Skyworth Electronics Co., Ltd.*), a
	company established under the laws of the PRC;
"Vendor"	創維集團建設發展有限公司 (Skyworth Group Construction Development
	Co. Ltd.*), a company established in the PRC and an indirect wholly-owned
	subsidiary of the Company; and

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"%"

per cent.

By order of the Board

Skyworth Group Limited

Lai Weide

Chairman of the Board

Hong Kong, 16 April 2021

As at the date of this notice, the Board comprises Mr. Lai Weide as the Chairman of the Board, Mr. Liu Tangzhi as executive Director and the chief executive officer, Ms. Lin Wei Ping, Mr. Shi Chi, Mr. Lin Jin and Mr. Lam Shing Choi, Eric as executive Directors; and Mr. Li Weibin, Mr. Cheong Ying Chew, Henry and Mr. Hung Ka Hai, Clement as independent non-executive Directors.

• For identification purpose only

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