Miji International : CHANGE IN USE OF PROCEEDS

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.

Miji International Holdings Limited

米 技 國 際 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1715)

CHANGE IN USE OF PROCEEDS

Reference is made to the prospectus of Miji International Holdings Limited (the "Company" and its subsidiaries, collectively the "Group") dated 29 June 2018 (the "Prospectus") in relation to the Share Offer, the interim report of the Company for the six months ended 30 June 2018 (the "Interim Report 2018") published on 13 September 2018, the annual report of the Company for the year ended 31 December 2018 (the "Annual Report 2018") published on 12 April 2019, the interim report of the Company for the six months ended 30 June 2019 (the "Interim Report 2019") published on 5 September 2019 and the annual report of the Company for the year ended 31 December 2019 (the "Annual Report 2019") published on 1 April 2020. Unless otherwise defined, capitalised terms used herein shall have the same meanings as defined in the Prospectus.

USE OF PROCEEDS

As disclosed in the section headed "Future Plans and Use of Proceeds" in the Prospectus, the Company intended to use the net proceeds raised from the Share Offer as follows:

1. approximately 32.1% of the net proceeds for establishment of four showrooms in major cities of the PRC;
2. approximately 23.9% of the net proceeds for partial repayment of bank loans;
3. approximately 23.8% of the net proceeds for expanding and strengthening sales and marketing capacities;
4. approximately 3.6% of the net proceeds for developing and diversifying product portfolio of Hobs and Stoves;

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1. approximately 6.9% of the net proceeds for the project of 米技電爐具智能化服務平台 建設 (Establishment of Smart Service Platform for Miji Electric Stoves*); and
2. approximately 9.6% of the net proceeds for general working capital.

The actual net proceeds raised from the Share Offer, net of underwriting commissions and other relevant expenses in connection with the Share Offer, were approximately HK$76.2 million (the "Net Proceeds").

As disclosed in the Interim Report 2018, Annual Report 2018, Interim Report 2019 and Annual Report 2019, approximately HK$24.5 million was allocated for the establishment of showrooms; approximately HK$18.2 million was allocated for repayment of bank loans, approximately HK$18.1 million was allocated for expanding and strengthening sales and marketing capacities; approximately HK$2.7 million was allocated for developing and

diversifying product portfolio; approximately HK$5.3 million was allocated for conducting project of 米技電爐具智能化服務平台建設; and approximately HK$7.4 million was allocated

for general working capital.

					Utilised		Unutilised
					amount of		amount of
					Net Proceeds		Net Proceeds
	Approximate		Actual		up to the date		as at the date
	percentage of		amount of		of this		of this
Intended use of Net Proceeds	Net Proceeds		Net Proceeds		announcement		announcement
	(approximately)		(approximately)		(approximately)		(approximately)
Establish showrooms in major cities
of the PRC	32.1%		HK$24.5 million		HK$11.9 million		HK$12.6 million
Repayment of bank loans	23.9%		HK$18.2 million		HK$18.2 million		-
Expand and strengthen sales and
marketing capacities	23.8%		HK$18.1 million		HK$18.1 million		-
Develop and diversify product
portfolio of hobs and stoves	3.6%		HK$2.7 million		HK$2.7 million		-
Conduct project of 米技電爐具
智能化服務平台建設
(Establishment of Smart Service
Platform for Miji Electric
Stoves*)	6.9%		HK$5.3 million		HK$5.3 million		-
General working capital	9.6%		HK$7.4 million		HK$7.4 million		-
Total	100.0%		HK$76.2 million		HK$63.6 million		HK$12.6 million

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CHANGE IN USE OF PROCEEDS

As at the date of this announcement, the unutilised Net Proceeds amounted to approximately HK$12.6 million (the "Unutilised Net Proceeds"). For the reasons set out in the paragraph headed "Reasons for and benefits of the change in use of proceeds" set out in this announcement below, the board of directors of the Company (the "Board") has resolved to change the use of Unutilised Net Proceeds as follows:

									Expected
									timeline
									for fully
					Unutilised				utilising the
					amount of				Unutilised
	Original		Revised		Net Proceeds		Revised	Net Proceeds
	approximate		approximate		as at the date		allocation of	after the
	percentage of		percentage of		of this		Unutilised	revised
Intended use of Net Proceeds	Net Proceeds		Net Proceeds		announcement		Net Proceeds	allocation
	(approximately)		(approximately)		(approximately)		(approximately)
Establish showrooms in major	32.1%	15.6%		HK$12.6 million		-	N/A
cities of the PRC
Repayment of bank loans	23.9%	30.4%		-		HK$5.0 million	HK$5.0 million
									to be utilised by
									31 December
									2020
Expand and strengthen sales and	23.8%	28.6%		-		HK$3.6 million	HK$3.6 million
marketing capacities									to be utilised by
									30 June 2021
Develop and diversify product	3.6%	8.9%		-		HK$4.0 million	HK$4.0 million
portfolio of hobs and stoves									to be utilised by
									30 June 2021
Conduct project of 米技	6.9%	6.9%		-		-	N/A
電爐具智能化服務平台
建設 (Establishment of Smart
Service Platform for Miji
Electric Stoves*)
General working capital	9.6%	9.6%		-		-	N/A
Total	100.0%	100.0%		HK$12.6 million		HK$12.6 million

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REASONS FOR AND BENEFITS OF THE CHANGE IN USE OF PROCEEDS

Impact of the novel coronavirus (the "COVID-19") on the global economy

The outbreak of the COVID-19 had significant adverse impact on the global economy and consumer confidence. Consumers were more conscious on their spending, which significantly affected the sales performance of retail industry. Despite the PRC government has taken measures to fight the COVID-19 and stimulate the economy, it is still too early to determine when the retail industry can fully recover. Under the existing economic conditions, the Board considers that it would be in the best interests of the Company and its shareholders to stop opening new retail stores and showrooms as they may not be able to generate sufficient revenue to cover operating costs, such as rental expenses and labour costs. Instead, it would be more appropriate to adjust the initial business development plan and re-allocate the Unutilised Net Proceeds for the (i) repayment of borrowings; (ii) expansion and strengthening of sales and marketing capacities; and (iii) development and diversification of product portfolio of hobs and stoves, for the reasons mentioned below.

Repayment of borrowings

As at the date of this announcement, the Group had outstanding borrowings of approximately HK$42.1 million and the original amount of Net Proceeds in the sum of approximately HK$18.2 million allocated for repayment of bank borrowings has been fully utilised. The Group intends to re-allocate a portion of the Unutilised Net Proceeds in the sum of HK$5 million to partially repay a bank borrowing that is subject to variable interest rate of 4.35% per annum and repayable in December 2020. The Board considers that that it will be desirable for the Group to re-allocate a portion of the Unutilised Net Proceeds to repay the Group's borrowings to improve the gearing ratio and minimise finance costs.

Expand and strengthen sales and marketing capacities

The popularity of live streaming in China is growing at a fast pace as live streaming takes place in real-time via mobile devices and it creates an interactive and immersive experience for the audience. A typical live streaming format involves a celebrity demonstrating a product and answering questions from the audience. Consumers can experience and order a new product via live streaming. This is more convenient than a physical visit to retail store and it would not be affected by the lock-down measures imposed by the PRC government to fight the COVID-19. Live streaming is becoming an important sales channel as it creates a lot of business opportunities for many enterprises. In light of the popularity of live streaming and the changing consumer behaviour, the Board believes that the Group's business operations can benefit from live streaming and it will be desirable for the Group to re-allocate a portion of the Unutilised Net Proceeds to establish a live streaming platform and conduct sales and marketing activities on this platform and other social media, which is expected to increase the recognition of the Company's brands and improves the Company's sales performance.

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Develop and diversify product portfolio of hobs and stoves

Research and development of new products is critical to the continuous success of the Group's business operations and the Board considers that that it will be desirable for the Group to re-allocate a portion of the Unutilised Net Proceeds to carry out the research and development of new products and technologies in order to enrich the Group's product portfolio.

The Board's views

The Board is of the view that the aforesaid re-allocation of the Unutilised Net Proceeds will be favourable to the Group's long term business development and will represent a more appropriate utilisation of the Unutilised Net Proceeds in light of the above reasons. The Board will closely monitor the utilisation of the Unutilised Net Proceeds with the interests of the Company and its shareholders in mind. The Board confirms that there is no material change in the business nature of the Group as set out in the Prospectus, the Interim Report 2018, the Annual Report 2018, the Interim Report 2019 and the Annual Report 2019. The Board considered that the proposed change in use of Net Proceeds will not have any material adverse impact on the operations of the Group and is in the best interests of the Company and its shareholders as a whole.

By order of the Board

Miji International Holdings Limited

Madam Maeck Can Yue

Chairperson and Executive Director

Hong Kong, 6 August 2020

As at the date of this announcement, the executive Directors of the Company are Madam Maeck Can Yue and Mr. Walter Ludwig Michel, and the independent non-executive Directors of the Company are Mr. Wang Shih-fang, Mr. Yan Chi Ming, Mr. Hooi Hing Lee and Mr. Gu Qing.

*  For identification purpose only

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