Sun King Power Electronics : VOLUNTARY ANNOUNCEMENT - DISPOSAL OF 19.25% EQUITY INTERESTS IN JIUJIANG SUNKING

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 580)

VOLUNTARY ANNOUNCEMENT -

DISPOSAL OF 19.25% EQUITY INTERESTS IN JIUJIANG SUNKING

This announcement is made by the Company on a voluntary basis.

THE DISPOSAL

On 23 July 2020 (after trading hours), the Vendor entered into the Share Transfer Agreement with the Purchaser, pursuant to which the Vendor has agreed to sell and the Purchaser has agreed to purchase 19.25% equity interests in Jiujiang Sunking for a Consideration of RMB100,000,000.

LISTING RULES IMPLICATIONS

As none of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Disposal exceeds 5%, the Disposal does not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

This announcement is made by the Company on a voluntary basis.

SHARE TRANSFER AGREEMENT

Date:

23 July 2020 (after trading hours)

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Parties:
Vendor:	Jiashan Sunking Power Equipment Technology Co. Ltd.* (嘉善華瑞賽晶電氣設備
	科技有限公司)
Purchaser:	Qingdao Zhongjunmaikesiwei Investment Management Centre (Limited
	Partnership)* (青島中駿麥克斯韋投資管理中心（有限合夥）)

The partners in the Purchaser are Mo Zongpei (莫宗霈) and Zhongjuntianbao Capital Management (Beijing) Co., Ltd.* (中駿天寶資本管理（北京）有限公司). Zhongjuntianbao Capital Management

(Beijing) Co., Ltd.* is ultimately owned by the following individuals/entity:

Individuals/Entity	Shareholding (%)
Lin Shang (藺上)	1.225
Wen Xiaofeng (溫曉峰)	1.000
Li Shiming (李世明)	30.000
Wen Junfeng (溫俊峰)	34.903
Ba Zhen (巴震)	29.372
Beijing Jindingzhiheng Investment Management Centre (Limited Partnership)* (北
京金鼎智恒投資管理中心（有限合夥）)(Note)	3.500

Note: The partners in Beijing Jindingzhiheng Investment Management Centre (Limited Partnership)* are Lin Shang (藺上), Shen Lu (沈露), Pi Liyang (皮里陽), Feng Mingming (馮明明), Li Shiming (李世明), Chang Jingjian (常敬鈃) and

Zhongjuntianbao Capital Management (Beijing) Co., Ltd.*.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, the Purchaser and its ultimate beneficial owners are (a) third parties independent of the Company and connected persons of the Company; and (b) not connected or otherwise associated with the existing shareholders of Jiujiang Sunking.

Subject of the Disposal

Pursuant to the Share Transfer Agreement, the Vendor has agreed to sell and the Purchaser has agreed to purchase 19.25% equity interests in Jiujiang Sunking, being an associate of the Company.

Consideration

Pursuant to the Share Transfer Agreement, the Consideration of RMB100,000,000 shall be payable by the Purchaser to the Vendor in cash in the following manner:

1. 40% of the Consideration, i.e. RMB40,000,000, within 5 working days from the effective day of the Share Transfer Agreement; and

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1. provided that the update on the register of shareholders of Jiujiang Sunking having been completed, the remaining 60% of the Consideration, i.e. RMB60,000,000, before 30 September 2020.

The Consideration was determined after arm's length negotiations between the Vendor and the Purchaser with reference to, among others, the net asset value of Jiujiang Sunking with a premium.

Completion of the Share Transfer Agreement

Completion of the Share Transfer Agreement shall take place upon the completion of the update on the register of shareholders of Jiujiang Sunking.

INFORMATION ON THE GROUP

The main businesses of the Group include the manufacture and trading of electronic power components. The Group's products include insulated gate bipolar transistor power modules, train operation safety equipment, power semiconductor devices, traction systems, anode saturable reactors, high voltage power capacitors and systems, and rectifiers. The Group's products are applied in railway system, power grid and industry.

INFORMATION ON THE PURCHASER

The Purchaser is mainly engaged in investment, investment management, equity investment management and investment consultancy (non-securities business).

INFORMATION ON JIUJIANG SUNKING

Jiujiang Sunking is principally engaged in the manufacturing and trading of rectifiers and special power supplies in the PRC and the Group's rectifier and special power supply businesses are solely conducted by Jiujiang Sunking.

Shanghai Tanda Rolling Stock Seat System Co. Ltd.* (上海坦達軌道車輛座椅系統有限公司) became the owner of 51% equity interests in Jiujiang Sunking on 28 June 2019 following the transfer of

43% equity interests from the Vendor and 8% equity interests from Beijing Hengyaoda Technology Development Centre (LLP)* (北京衡耀達科技發展中心（有限合夥）), details of which are set out in

the announcements of the Company dated 29 April 2019 and 30 April 2020 and the circular of the Company dated 4 June 2019. Subsequent to the transfer of 43% equity interests in Jiujiang Sunking to Shanghai Tanda Rolling Stock Seat System Co. Ltd.* and prior to the completion of the Share Transfer Agreement, the Company holds 19.25% equity interests in Jiujiang Sunking through the Vendor.

As at 31 December 2019, the net asset value of Jiujiang Sunking amounted to RMB259,652,899.

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The net profits (both before and after taxation and extraordinary items) attributable to Jiujiang Sunking for the two financial years immediately preceding the Disposal are set out below:

	For the year ended 31 December
	2018	2019
	(unaudited)	(audited)
	RMB	RMB
Net profits before taxation and extraordinary items	71,161,823	14,838,259
Net profits after taxation and extraordinary items	46,417,114	12,790,920

Following the completion of the Share Transfer Agreement, the Company will cease to hold any equity interest in Jiujiang Sunking.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Directors consider that it is beneficial to the Group to dispose of the remaining 19.25% equity interests in Jiujiang Sunking for the following reasons:

1. the rectifiers manufactured by Jiujiang Sunking are mainly used in the electrolytic aluminium industry in the PRC. However, the electrolytic aluminium industry in the PRC has been stagnant in recent years as it hinges on the PRC government policy. As a result, the Group's revenue derived from sale of rectifiers has declined significantly since the year ended 31 December 2018; and
2. due to the stagnant electrolytic aluminium industry in the PRC and the significant decline in revenue derived from sale of rectifiers, the Directors have decided to divert management attention and resources into our core business of manufacture and trading of electronic power components, thereby streamlining and benefiting the operations of the Group as a whole.

The Directors believe that the terms of the transactions contemplated under the Share Transfer Agreement are fair and reasonable and in the interest of the Company and its shareholders as a whole.

FINANCIAL IMPACT OF THE DISPOSAL

The Disposal is expected to realise a gain of RMB21,377,362 for the Group which is derived from the difference between the Consideration of RMB100,000,000 and the carrying value of 19.25% equity interests in Jiujiang Sunking, being RMB78,622,638.

The actual financial impact of the Disposal is subject to review by the Company's auditors. The Group expects to receive net proceeds of RMB100,000,000 from the Disposal, which is intended to be applied to research and development of new products (which are mainly insulated gate bipolar transistors) and general working capital.

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LISTING RULES IMPLICATION

As none of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Disposal exceeds 5%, the Disposal does not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

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

"Board"	the board of Directors
"Company"	Sun.King Power Electronics Group Limited, a limited liability company
	incorporated in the Cayman Islands, the shares of which are listed on the
	Stock Exchange
"connected persons"	has the meaning ascribed to it under the Listing Rules
"Consideration"	the consideration payable by the Purchaser to the Vendor for the Disposal
"Director(s)"	the director(s) of the Company
"Disposal"	the disposal of 19.25% equity interests in Jiujiang Sunking by the Vendor to
	the Purchaser
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Jiujiang Sunking"	Jiujiang Sun.King Technology Co., Ltd.* (九江賽晶科技股份有限公司),
	a limited liability company established in the PRC and an associate of the
	Company
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange
"PRC"	the People's Republic of China, which for the purpose of this announcement,
	excludes Hong Kong, Macau Special Administrative Region and Taiwan
"Purchaser"	Qingdao Zhongjunmaikesiwei Investment Management Centre (Limited
	Partnership)* (青島中駿麥克斯韋投資管理中心（有限合夥）)
"RMB"	Renminbi, the lawful currency of the PRC

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"Share Transfer	the share transfer agreement entered into between the Vendor and the
Agreement"	Purchaser dated 23 July 2020 in relation to the Disposal
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Vendor"	Jiashan Sunking Power Equipment Technology Co. Ltd.* (嘉善華瑞賽晶電
	氣設備科技有限公司), a limited liability company established in the PRC
	and a wholly-owned subsidiary of the Company
"working days"	means any day not falling on a Saturday, a Sunday and a statutory holiday in
	the PRC

The English names of the entities marked with "*" in this announcement are translations from their Chinese names and are for identification purpose only. If there is any inconsistency, the Chinese names shall prevail.

By Order of the Board

Sun.King Power Electronics Group Limited

Xiang Jie

Chairman

Hong Kong, 23 July 2020

As at the date of this announcement, the executive Directors are Mr. Xiang Jie, Mr. Gong Renyuan and Mr. Yue Zhoumin; the non-executive Directors are Ms. Gao Lei, Mr. Zhu Ming and Ms. Zhang Ling; and the independent non-executive Directors are Mr. Chen Shimin, Mr. Zhang Xuejun, Mr. Leung Ming Shu and Mr. Zhao Hang.

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