Sheng Ye Capital : DISCLOSEABLE TRANSACTION - DISPOSAL OF ACCOUNTS RECEIVABLE

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SHENG YE CAPITAL LIMITED

盛 業 資 本 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6069)

DISCLOSEABLE TRANSACTION -

DISPOSAL OF ACCOUNTS RECEIVABLE

THE DISPOSAL AGREEMENT

The Board hereby announces that on 8 May 2021, Khorgos Yong Zhuo Factoring, an indirect wholly owned subsidiary of the Company, entered into the Disposal Agreement with the Purchaser pursuant to which Khorgos Yong Zhuo Factoring agreed to dispose of and the Purchaser agreed to acquire the Accounts Receivable at a consideration of approximately RMB80.1 million.

LISTING RULES IMPLICATIONS

All relevant applicable percentage ratios for the Company as calculated under Rule 14.07 of the Listing Rules in relation to the Disposal Agreement on standalone basis are less than 5%; therefore, the Disposal Agreement on standalone basis does not constitute a discloseable transaction of the Company and is not subject to any disclosure requirements pursuant to Chapter 14 of the Listing Rules.

Nevertheless, the Directors consider that since the Previous Disposal Agreements and the Disposal Agreement were entered into by Khorgos Yong Zhuo Factoring with the same Purchaser within 12 months, the transaction contemplated under the Disposal Agreement shall be aggregated with the transactions under the Previous Disposal Agreements under Rule 14.22 of the Listing Rules.

As the highest applicable percentage ratio for the Company as calculated under Rule 14.07 of the Listing Rules in relation to the Disposal Agreement on aggregate basis exceeds 5% but is less than 25%, the Disposal Agreement constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the reporting and announcement requirements.

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INTRODUCTION

References are made to the announcements of the Company dated 11 May 2020, 19 May 2020, 27 May 2020, 29 June 2020, 22 July 2020, 5 August 2020, 14 January 2021, 24 March 2021, 26 March 2021, 13 April 2021, 20 April 2021 and 27 April 2021 in relation to the Previous Disposal Agreements.

On 14 March 2019, Khorgos Yong Zhuo Factoring entered into the Framework Disposal Agreement with the Purchaser pursuant to which Khorgos Yong Zhuo Factoring agreed to dispose of and the Purchaser agreed to acquire accounts receivables from Khorgos Yong Zhuo Factoring in an aggregate amount of not more than RMB5 billion.

Pursuant to the terms of the Framework Disposal Agreement, on 8 May 2021, Khorgos Yong Zhuo Factoring entered into the Disposal Agreement with the Purchaser, pursuant to which Khorgos Yong Zhuo Factoring agreed to dispose of and the Purchaser agreed to acquire the Accounts Receivable at a consideration of approximately RMB80.1 million.

THE DISPOSAL AGREEMENT

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

Date:	8 May 2021
Parties:	(1) The Purchaser, a company established in the PRC with limited liability
	and principally engaged in trust business. As at the date of this
	announcement, to the knowledge of the Directors, the identity of the de
	facto controller of the Purchaser is the Department of Finance of Yunnan
	Province* ( 雲南省財政廳) which is principally engaged in supervision
	and management of finance and taxation within Yunnan Province, PRC.
	To the best knowledge, information and belief of the Directors having
	made all reasonable enquiries, the Purchaser and its ultimate beneficial
	owner are Independent Third Parties.
	(2) Khorgos Yong Zhuo Factoring, an indirect wholly owned subsidiary
	of the Company whose principal business is, among other things,
	commercial factoring.

The Accounts Receivable to be disposed of

The book value of the Accounts Receivable was approximately RMB75.9 million. The Accounts Receivable was comprised of accounts receivable due from the Debtor. The expiry date of the Accounts Receivable was 7 April 2022.

On 8 May 2021, Khorgos Yong Zhuo Factoring and the Purchaser entered into the acknowledgement of disposal with the Debtor pursuant to which the parties confirmed the book value of the Accounts Receivable. Further, the Debtor acknowledged that Khorgos Yong Zhuo Factoring has been appointed to manage the Accounts Receivable. After the completion of the Disposal Agreement, the Debtor shall continue to pay the monies due under the Accounts Receivable to Khorgos Yong Zhuo Factoring, which shall then transfer the monies received to the Purchaser. Please refer to the section headed "Trust Management Service" in this announcement for details.

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The disposal is without recourse against Khorgos Yong Zhuo Factoring, which means that Khorgos Yong Zhuo Factoring is not liable for default in payment by the Debtor.

Consideration and payment terms

The consideration to be paid by the Purchaser to acquire the Accounts Receivable was approximately RMB80.1 million. The consideration was settled by the Purchaser by paying to the designated bank account of Khorgos Yong Zhuo Factoring for the Accounts Receivable on 8 May 2021.

Basis of determination of the consideration

The consideration was determined on arm's length negotiations between Khorgos Yong Zhuo Factoring and the Purchaser based on 1) the book value of the Accounts Receivable; 2) the number of days between the date of disposal and the expected date of payment by the Debtor; and 3) the credit worthiness of the Debtor.

Completion of the disposal

Completion of the Disposal Agreement took place upon the date of receipt of the consideration by Khorgos Yong Zhuo Factoring, being 8 May 2021.

Pursuant to the transfer registration agreement between Khorgos Yong Zhuo Factoring and the Purchaser on 14 March 2019, Khorgos Yong Zhuo Factoring agreed to provide assistance to the Purchaser to register in the Zhongdeng Net the transfer of accounts receivable being disposed of by Khorgos Yong Zhuo Factoring to the Purchaser pursuant to the Framework Disposal Agreement including the Accounts Receivable.

TRUST MANAGEMENT SERVICE

According to the Purchaser, the Purchaser is acquiring the Accounts Receivable for and on behalf of a trust set up by it and using the trust funds. Pursuant to the terms of the Framework Disposal Agreement, Khorgos Yong Zhuo Factoring agreed to provide accounts receivable management service in relation to the Accounts Receivable to the Purchaser. Khorgos Yong Zhuo Factoring shall collect the monies due from the Debtor under the Accounts Receivable for and on behalf of the Purchaser and Khorgos Yong Zhuo Factoring shall transfer the monies collected to a designated bank account of the Purchaser on the date of receipt of the monies (or the next business day if the date of receipt of the monies is not a business day). The services were provided in consideration of the Purchaser agreeing to enter into the Disposal Agreement and therefore no service fee will be charged by Khorgos Yong Zhuo Factoring for the services provided by it.

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

After the completion of the transaction under the Disposal Agreement, the Board expects that the Company will record a gain of approximately RMB4.0 million for the Disposal Agreement based on the difference between the book value of the Accounts Receivable being disposed of and the consideration of the disposal, net of sales related taxes.

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The Group intends to use the proceeds from disposal of the Accounts Receivable to finance the factoring loans granted by the Group to its customers and as general working capital.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Group is a leading supply chain fintech platform provider of one-stop SaaS and financial services solutions for companies within the industry esosystem across the Asia-Pacific. Powered by fintech capabilities and an in-depth understanding of the industries it serves, the Group partners with various funding institutions to offer a range of flexible accounts receivable-based supply chain financing products and corporate services to meet the significant and underserved financing needs of SMEs in the region. The Directors consider that the Disposal Agreement was entered into on normal commercial terms and in the ordinary and usual course of business of the Group.

The Group entered into the Disposal Agreement with the intention of improving the cash flow of the Group, managing the Group's factoring assets portfolio and providing funds for the Group's factoring business.

Given that the Disposal Agreement was conducted in the ordinary and usual course of business of Khorgos Yong Zhuo Factoring and under normal commercial terms, the Directors are of the view that the terms of the Disposal Agreement are fair and reasonable and are in the interests of the Company and Shareholders as a whole.

LISTING RULES IMPLICATIONS

All relevant applicable percentage ratios for the Company as calculated under Rule 14.07 of the Listing Rules in relation to the Disposal Agreement on standalone basis are less than 5%; therefore, the Disposal Agreement on standalone basis does not constitute a discloseable transaction of the Company and is not subject to any disclosure requirements pursuant to Chapter 14 of the Listing Rules.

Nevertheless, the Directors consider that since the Previous Disposal Agreements and the Disposal Agreement were entered into by Khorgos Yong Zhuo Factoring with the same Purchaser within 12 months, the transaction contemplated under the Disposal Agreement shall be aggregated with the transactions under the Previous Disposal Agreements under Rule 14.22 of the Listing Rules.

As the highest applicable percentage ratio for the Company as calculated under Rule 14.07 of the Listing Rules in relation to the Disposal Agreement on aggregate basis exceeds 5% but is less than 25%, the Disposal Agreement constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the reporting and announcement requirements.

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DEFINITIONS

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

"Accounts Receivable"	the accounts receivable to be disposed of pursuant to the Disposal
	Agreement
"Board"	the board of Directors
"Company"	Sheng Ye Capital Limited, an exempted company incorporated in the
	Cayman Islands with limited liability, whose Shares are listed on the
	Stock Exchange (stock code: 6069)
"connected person(s)"	has the meaning ascribed to it under the Listing Rules
"Debtor"	the underlying debtor of the Accounts Receivable which is principally
	engaged in the business of refining crude oil and trading petroleum and
	petro-chemical products
"Director(s)"	the director(s) of the Company
"Disposal Agreement"	The accounts receivable disposal agreement between Khorgos Yong
	Zhuo Factoring and the Purchaser dated 8 May 2021 pursuant to which
	Khorgos Yong Zhuo Factoring agreed to dispose of and the Purchaser
	agreed to acquire the Accounts Receivable
"Framework Disposal	the framework disposal agreement between Khorgos Yong Zhuo
Agreement"	Factoring and the Purchaser dated 14 March 2019 pursuant to which
	Khorgos Yong Zhuo Factoring agreed to dispose of and the Purchaser
	agreed to acquire accounts receivables from Khorgos Yong Zhuo
	Factoring in an aggregate amount of not more than RMB5 billion
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Independent Third	the independent third party(ies) who is/are, to the best of the Directors'
Party(ies)"	knowledge, information and belief having made all reasonable enquiries,
	independent of and not connected with the Company and the connected
	person(s) (as defined in the Listing Rules) of the Company
"Khorgos Yong Zhuo	霍 爾 果 斯 永 卓 商 業 保 理 有 限 公 司 (Khorgos Yong Zhuo Factoring
Factoring"	Limited), a company established in the PRC and a subsidiary of the
	Group
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange

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