Tianyun International : Discloseable Transaction Acquisition of the Entire Issued Share Capital in the Target Company

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This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

Tianyun International Holdings Limited

天韵國際控股有限公司

(incorporated in the British Virgin Islands with limited liability)

(Stock code: 6836) DISCLOSEABLE TRANSACTION ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL IN THE TARGET COMPANY ACQUISITION

The Board is pleased to announce that on 15 September 2017 (after trading hours of the Stock Exchange), the Purchaser, a wholly-owned subsidiary of the Company, entered into the Agreement with the Vendor in relation to the Acquisition, pursuant to which the Vendor has agreed to sell, and the Purchaser has agreed to purchase, the Sale Share.

LISTING RULES IMPLICATIONS

As the applicable percentage ratios as calculated under Rule 14.06 of the Listing Rules in respect of the Acquisition are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Acquisition is subject to the reporting and announcement requirements but is exempt from shareholders' approval requirement under Chapter 14 of the Listing Rules.

INTRODUCTION

The Board is pleased to announce that on 15 September 2017 (after trading hours of the Stock Exchange), the Purchaser, a wholly-owned subsidiary of the Company, entered into the Agreement with the Vendor in relation to the Acquisition, pursuant to which the Vendor has agreed to sell, and the Purchaser has agreed to purchase, the Sale Share for an aggregate consideration of HK$55 million (equivalent to approximately RMB46.1 million) (subject to adjustment).

The principal terms of the Agreement are summarized below.

THE AGREEMENT

Date: 15 September 2017 (after trading hours of the Stock Exchange)

Parties: (1) Purchaser: Tianyi Holding Hong Kong Limited, a wholly-owned subsidiary of the Company;

(2) Vendor: Long Advance Investments Limited, a company wholly-owned by Mr. Li Jinrong

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, the Vendor and its ultimate beneficial owner are Independent Third Parties.

The Purchaser is a company incorporated in Hong Kong with limited liability. It is a wholly-owned subsidiary of the Company and is principally engaged in investment holding and trading.

Subject of the Acquisition

Pursuant to the Agreement, the Vendor has agreed to sell, and the Purchaser has agreed to purchase, the Sale Share, representing the entire issued share capital of the Target Company upon Completion. Immediately before Completion, the Vendor is the legal and beneficial owner of the Sale Share.

There is no restriction on the subsequent sale of the Sale Share.

Consideration

The Consideration payable for the sale and purchase of the Sale Share shall be HK$55 million (equivalent to approximately RMB46.1 million) (subject to adjustment), which shall be settled in the following manner:

1. HK$33 million (equivalent to approximately RMB27.6 million) of the Consideration shall be settled in cash (the "Cash Consideration") in the following manner:

2. a sum of HK$6 million (equivalent to approximately RMB5.0 million) has been paid upon signing of the Agreement, the same of which will be refundable if Completion does not take place;

3. the remaining balance of HK$27 million (equivalent to approximately RMB22.6 million) shall be paid within 90 days after Completion;

4. a maximum of HK$22 million (equivalent to approximately RMB18.4 million) of the Consideration shall be settled by way of allotment and issue of 17,188,000 new Shares (the "Consideration Shares") at the consideration of HK$1.28 per Share in the following manner:

5. if, during the period of three years commencing from the Completion Date, the aggregate amount of production volume of the Target Group can reach 80,000 tonnes of processed fruits (the "Target Production Volume") and the total amount of revenue from its principal business can reach RMB700 million (the "Target Revenue"), the Purchaser shall procure the Company to allot and issue:

   (aa) 50% of the Consideration Shares within 30 days after the issue of the relevant financial statements of the Target Group where it is shown that the Target Group has achieved 50% of the Target Production Volume and 50% of the Target Revenue; and

   (bb) the remaining 50% of the Consideration Shares within 30 days after the issue of the relevant financial statements of the Target Group where it is shown that the Target Group has achieved the Target Production Volume and the Target Revenue;

6. if the Target Production Volume and/or Target Revenue cannot be achieved, the number of Consideration Shares shall be reduced by such proportion equivalent to the percentage of shortfall between (aa) the actual production volume and the Target Production Volume or (bb) the actual revenue and the Target Revenue, whichever the shortfall is larger.

The Consideration for the Acquisition was determined after arms' length negotiations between the Purchaser and the Vendor with reference to, among others, the net asset value of the Target Company, and the valuation results in respect of the land-use rights and buildings, and machinery and equipment of the Target Company as at 31 July 2017 prepared by an independent valuer.

The issue price of HK$1.28 per Consideration Share was arrive at after arm's length negotiations between the Purchaser and the Vendor after taking into account the recent growth trend of the price of the Shares, future prospects of the Group and the average of the

closing price of the Shares during the period of 30 consecutive trading days immediately preceding the date of the Agreement.

The issue price represents:

1. a premium of approximately 25.0% over the closing price of HK$1.02 per Share as quoted on the Stock Exchange on the date of the Agreement;

2. a premium of approximately 25.0% over the average of the closing price of HK$1.02 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to the date immediately before the date of the Agreement;

3. a premium of approximately 3.4% over the average of the closing price of HK$1.24 per Share as quoted on the Stock Exchange for the last 30 consecutive trading days up to the date immediately before the date of the Agreement; and

4. a premium of approximately 82.3% over the unaudited consolidated net assets value of approximately HK$0.70 per Share as at 30 June 2017 as published in the interim report, based on the unaudited net assets value of approximately HK$686.3 million and the 977,462,000 Shares in issue as at the date of the Agreement.

The Consideration Shares will be issued pursuant to the general mandates to issue shares granted by the Shareholders during the annual general meeting of the Company held on 16 May 2017. As at the date of this announcement, none of the general mandates have been utilized. An application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

The issue price shall be, from time to time, subject to adjustment upon occurrence of, inter alia, any of the following events:

1. consolidation or subdivision of Shares;

2. capitalisation of profits or reserves; or

3. offer of new Shares for subscription by way of a rights issue or an open offer at a price which is less than the market price at the date of the announcement of the terms of such offer per Share to Shareholders.

No adjustment will be made if it will cause the Company to allot and issue Shares in excess of the general mandate.

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