Tingyi Cayman Islands : REVISION OF ANNUAL CAPS FOR CONTINUING CONNECTED TRANSACTION — LOGISTICS SERVICES

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.

TINGYI (CAYMAN ISLANDS) HOLDING CORP.

康 師 傅 控 股 有 限 公 司*

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 0322)

REVISION OF ANNUAL CAPS FOR

CONTINUING CONNECTED TRANSACTION - LOGISTICS

SERVICES

This announcement is made pursuant to Rule 14A.54 of the Listing Rules.

Reference is made to the announcement of the Company dated 22 June 2020 in relation to the Logistics Agreement.

On 30 September 2021, the Company and Ting Tong entered into the Supplemental Agreement to revise the annual caps for the continuing connected transactions under the Logistics Agreement.

As the applicable percentage ratios as defined under Rule 14.07 of the Listing Rules for the revised annual caps under the Supplemental Agreement on an annual basis are more than 0.1% but less than 5%, the revision to the annual caps is subject to the reporting and announcement requirements and exempted from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

Reference is made to the announcement of the Company dated 22 June 2020 in relation to the Logistics Agreement.

− 1 −

REVISION TO THE ANNUAL CAPS

On 30 September 2021, the Company and Ting Tong entered into the Supplemental Agreement to revise the annual caps for the Logistics Agreement for the two financial years of 2021 and 2022 as follows:

Revised Annual Caps

Pursuant to the Supplemental Agreement, the annual caps for the logistics services to be provided by Ting Tong and its subsidiaries to the Group for the two financial years of 2021 and 2022 will be revised as follows:

	For the year ended
	31 December
	2021	2022
	RMB'000	RMB'000
Original annual cap	1,400,000	1,700,000
Revised annual cap	1,900,000	2,700,000

Basis of determining the revised annual caps

The revised annual caps were determined after arm's length negotiations between the Company and Ting Tong based on (i) the historical transaction amount; and (ii) the expected increase in demand by the Group for the captive logistics services from Ting Tong and its subsidiaries.

The historical transaction amounts for the logistics services were as follows:

	For the year
	ended	For the six
	31 December	months ended
	2020	30 June 2021
	RMB'000	RMB'000
Original annual cap	1,100,000	1,400,000(Note)
Actual transaction amount	670,322	775,959

Note: The annual cap for 2021 is for the whole financial year.

Save for the revision to the annual caps, the other terms of the Logistics Agreement remain unchanged.

− 2 −

SUMMARY INFORMATION OF THE LOGISTICS AGREEMENT

The other terms of the Logistics Agreement are summarized below:

Services:	Ting		Tong and its subsidiaries will provide
	transportation, warehousing and loading and
	unloading services to the Group.
Term:	The	Logistics Agreement has a term until 31
	December 2022.
Service fee:	The service fee of the logistics services provided
	by Ting Tong and its subsidiaries to the Group will
	be based on the quoted price for the logistics
	services to be provided. Such quoted price will be
	determined on a quarterly basis based on arm's
	length negotiations between the parties on normal
	commercial terms with reference to:
	(a)	the prevailing market price for the same or
		substantially similar services, taking into
		account the service fee of the same or
		substantially similar services with comparable
		scope and level of services offered by
		independent third party logistics providers;
	(b)	if	there	are	insufficient	comparable
		transactions to (a) above, on normal
		commercial terms comparable to those
		received from independent third parties in
		respect of the same or substantially similar
		services with comparable scope and level of
		services; and
	(c)	if both (a) and (b) above are not applicable, by
		reference to the average price of similar
		services previously procured by the Group,
		and on normal commercial terms which are no
		less favourable to the Group than that are
		available from independent third parties.

Payment for the service fee under the Logistics Agreement will be calculated on a monthly basis upon completion of the services, with additional credit terms of 30 days. The payment will be made on the monthly payment day specified by the Group after the end of the credit terms.

− 3 −

INFORMATION ON THE PARTIES

The Group is principally engaged in the production and distribution of instant noodle and beverage products in the PRC.

Ting Tong is a limited liability company incorporated in the Cayman Islands. It is principally engaged in the provision of logistics services. Ting Tong is a subsidiary of Great System. Great System is an investment holding company incorporated in Singapore and is owned by Mr. Wei Ing-Chou and his brothers, Mr. Wei Ying-Chiao, Mr. Wei Yin-Chun and Mr. Wei Yin-Heng, and their respective spouses Ms. Wei Chang Lu-Yun, Ms. Lin Li-Mien, Ms. Wei Hsu Hsu-Mien and Ms. Wei Tu Miao in equal proportions. Mr. Wei Ing-Chou is the father of Mr. Wei Hong-Ming, the Chairman of the Board and an executive Director of the Company, and Mr. Wei Hong-Chen, an executive Director of the Company. As such, Ting Tong is a connected person of the Company.

REASONS FOR THE REVISION TO THE ANNUAL CAPS

Ting Tong and its subsidiaries have been providing logistics services to the Group for more than ten years. Owing to the Group's strategy to establish a nationwide integrated distribution network, the higher trading volume in the Group's products, and the increase in gasoline and diesel prices, the original annual caps under the Logistics Agreement for the two financial years of 2021 and 2022 are not expected to be able to meet the Group's demand for the captive logistics services from Ting Tong and its subsidiaries. The entering into of the Supplemental Agreement will enable the Group to continue to cooperate with Ting Tong and its subsidiaries on delivering the Group's products to the market.

Given that the Supplemental Agreement has been entered into after arm's length negotiations and under normal commercial terms, the Directors (including the independent non-executive Directors but excluded Mr. Wei Hong-Ming, the Chairman of the Board and an executive Director of the Company, and Mr. Wei Hong-Chen, an executive Director of the Company, who are considered to be interested in the transactions contemplated under the Supplemental Agreement and have not participated in the discussion in relation to the Supplemental Agreement and have abstained from voting for the resolution proposed to approve the Supplemental Agreement) consider that the transactions contemplated under the Supplemental Agreement and the revised annual caps are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

− 4 −

LISTING RULES IMPLICATIONS

As the applicable percentage ratios as defined under Rule 14.07 of the Listing Rules for the revised annual caps under the Supplemental Agreement on an annual basis are more than 0.1% but less than 5%, the revision to the annual caps is subject to the reporting and announcement requirements and exempted from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

At the Board meeting held to approve the Supplemental Agreement, Mr. Wei Hong-Ming and Mr. Wei Hong-Chen are considered to be interested in the transactions contemplated thereunder and have abstained from voting for the resolution proposed to approve the Supplemental Agreement.

INTERNAL CONTROL PROCEDURES

To ensure that the terms of the continuing connected transactions of the Group are fair and reasonable and no less favourable to the Group than those available to/from independent third parties, the Group has in place the following internal control and pricing policies under which:

Internal control and pricing policies

1. the Group maintains a list of carefully selected suppliers and service providers. The list is regularly reviewed and updated. For a supplier or service provider to become listed, the Group will initially conduct and must be satisfied with the on-site visits to the supplier or service provider, the supplier or service provider must also have a good track record with the Group in terms of the quality of the products or services which is reviewed by the quality assurance team of the Group (the "Quality Assurance Department"). The supplier or service provider must also have a track record of at least one year. Further, if the supplier or service provider has not supplied any products or provided any services to the Group for more than a year, the supplier or service provider will be delisted from the Group's list and the Group will initiate the full selection procedure (including on-site visits and quality checks) for the supplier or service provider to be re-included onto the Group's list;
2. with respect to any potential orders, the research and development department (the "R&D Department") or the purchasing department (the "Purchasing Department") of the Group will first discuss and formulate the details of the specifications of the order (including materials, safety, functions, the specification of the relevant products and the scale and scope of the relevant services);

− 5 −