Xinjiang La Chapelle Fashion : RECEIPT OF NOTICE OF FORCED AUCTION IN RESPECT OF THE A SHARES HELD BY THE CONCERT PARTY OF CONTROLLING SHAREHOLDER FROM SHANGHAI FINANCIAL COURT

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.

อᖛזࢀԎဧ؂ٰུ΅Ϟࠢʮ̡

Xinjiang La Chapelle Fashion Co., Ltd.

(formerly known as "Shanghai La Chapelle Fashion Co., Ltd.

€ɪऎזࢀԎဧ؂ٰུ΅Ϟࠢʮ̡")

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 06116)

RECEIPT OF NOTICE OF FORCED AUCTION IN RESPECT

OF THE A SHARES HELD BY THE CONCERT PARTY OF CONTROLLING

SHAREHOLDER FROM SHANGHAI FINANCIAL COURT

As Mr. Xing Jiaxing (the controlling shareholder and de facto controller of the Company) and Shanghai Hexia (the concert party of Mr. Xing Jiaxing) did not perform certain obligations under the Notarised Documents of Creditor's Rights arising from share pledge repurchase transactions in relation to their Pledged Shares, the Shanghai Financial Court proposes to conduct an auction or a sale of a total of 186,800,000 A Shares held collectively by Mr. Xing Jiaxing and Shanghai Hexia and their respective dividends, representing 34.11% of the total issued share capital of the Company and 99.85% of the total number of shares of the Company collectively held by Mr. Xing Jiaxing and Shanghai Hexia.

On 1 March 2021, the Company received the Notice of Judicial Disposal of Shares* ( ̡جஈໄٰ ୃʮѓ') from the Shanghai Financial Court informing the Company that the judicial disposal of 45,200,000 A Shares held by Shanghai Hexia will be publicly conducted on the judicial assistance execution platform of the Shanghai Stock Exchange for block trade of shares on 26 March 2021.

As of the date of this announcement, the 141,600,000 A Shares held by Mr. Xing Jiaxing, the de facto controller of the Company, have already been subject to the judicial auction procedures. If the auction of all or a substantial portion of the auctioned shares are completed, each of Mr. Xing Jiaxing and Shanghai Hexia may cease to be a controlling shareholder (as defined under the Listing Rules) of the Company and a de facto controller of the Company under the SSE Listing Rules.

Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company.

I. BACKGROUND

This announcement is made by Xinjiang La Chapelle Fashion Co., Ltd. (the "Company" together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Reference is made to the announcements of the Company dated 12 July 2020, 16 July 2020, 17 August 2020, 24 September 2020, 10 November 2020, and 31 January 2021 in relation to (a) the A shares of the Company (the "A Shares") held by (i) Mr. Xing Jiaxing, the controlling shareholder and de facto controller of the Company and (ii) Shanghai Hexia Investment Co., Ltd. ("Shanghai Hexia"), the party acting in concert with Mr. Xing Jiaxing, being subject to a subordinated freezing order (the "Freezing Order(s)"); (b) a possible potential auction or sale of such A Shares by the Shanghai Financial Court* (ɪऎږፄج৫) ("Shanghai Financial Court") and (c) the receipt by the Company of a notice of forced auction in respect of the A Shares held by Mr. Xing Jiaxing from the Shanghai Financial Court (the "Announcements"). Unless otherwise defined, capitalised terms used herein shall have the same meanings as those defined in the Announcements.

As disclosed in the Announcements and as at the date of this announcement:

(i) Mr. Xing Jiaxing directly holds 141,874,425 A Shares of the Company, representing 25.91% of the total issued share capital of the Company ("Mr. Xing's A Shares"). Mr. Xing Jiaxing has pledged 141,600,000 A Shares in total, representing 99.81% of the Company's shares held directly by him and 25.85% of the total issued share capital of the Company.

(ii) Shanghai Hexia holds 45,204,390 A Shares, representing 8.25% of the total issued share capital of the Company. Shanghai Hexia has pledged 45,200,000 A Shares in total, representing 99.99% of the Company's shares held by it and 8.25% of the total issued share capital of the Company.

• (iii) The aforementioned share pledges of 186,800,000 A Shares (the "Pledged Shares") are all currently in default as the respective minimum performance guarantee ratios required by such share pledges have not been met.

• (iv) Mr. Xing Jiaxing and Shanghai Hexia hold a total of 187,078,815 A Shares, representing 34.16% of the total issued share capital of the Company. All such 187,078,815 A Shares are subject to the Freezing Orders as Mr. Xing Jiaxing and Shanghai Hexia did not repurchase such respective A Shares pledged by them to Haitong Securities or CITIC Securities, or adopt security measures, as a result of which Haitong Securities and CITIC Securities applied to Shanghai Financial Court for the Freezing Order over such A Shares.

• (v) The Shanghai Financial Court has issued the Enforcement Ruling (2020) Hu 74 Zhi one of No. 216 and (2020) Hu 74 Zhi one of No. 425 *( ੂБ൒֛ࣣ'(2020)လ74ੂ216໮ʘɓe(2020)လ 74ੂ425໮ʘɓ) pursuant to which the Shanghai Financial Court made a ruling for the auction or sale of the Pledged Shares.

• (vi) The Shanghai Financial Court has issued the Notice of Judicial Disposal of Shares (2020) Hu Zhi No.425 *(̡جஈໄٰୃʮѓ'(2020)လ74ੂ425໮), pursuant to which the Shanghai Financial Court made a ruling for the compulsory auction of the pledged shares held by Mr. Xing Jiaxing.

II. NOTICE OF JUDICIAL DISPOSAL OF SHARES

On 1 March 2021, the Company received (2020) Hu 74 Zhi No. 216 Notice of Judicial Disposal of Shares* ((2020)လ74ੂ216໮̡جஈໄٰୃʮѓ') from the Shanghai Financial Court informing the Company that the judicial disposal of the A Shares of Shanghai Hexia (the concert party of Mr. Xing Jiaxing and the de facto controller of the Company) will be publicly conducted on the judicial assistance execution platform of the Shanghai Stock Exchange for block trade of shares ("Judicial Execution Platform") on 26 March 2021.

The Shanghai Financial Court will publicly conduct judicial disposal of shares on the Judicial Execution Platform on 26 March 2021. The content of the notice is disclosed as follows:

"1. Disposal subject: 45,200,000 shares of the Company held by Shanghai Hexia, Stock abbreviation: *STזࢀ, stock code: 603157, Share nature: Restricted shares, accounting for 8.25% of the total share capital of the Company. This disposal may result in changes in the de facto controller and major shareholder of the Company.

Auction price: The initial unit price of the disposal of shares is 70% of the evaluated price of RMB1.81 per share on 17 November 2020 (being RMB1.27), the valuation benchmark date of such portion of shares. Any bid not exceeding such initial unit price of disposal shall be invalid.

Special Notice: After inquiries with the securities registration and clearing organisation and the Company, it is noted that the above-mentioned restricted shares are pre-IPO shares, and the original date of release of the restricted sales is 25 September 2020. Reasons for not releasing restricted sales: According to the explanation provided by the Company to the Shanghai Financial Court, pursuant to the Company's plan to stabilize the Company's share price and the undertaking made by the controlling shareholder Xing Jiaxing according to such plan, when the preconditions for activating the share price stabilisation measures are met, if the controlling shares violate the relevant obligations to stabilize the Company's share price, the Company will take measures such as not transferring the Company's shares and extending the lock-up period until it has completed the above measures in accordance with the share price stabilization measures, details of which are set out in the "Listing Announcement on the Initial Public Offering of A Shares"* (࠯ϣʮක೯БAٰٰୃɪ̹ʮѓࣣ') of the Company dated 22 September 2017. Before participating in the bidding, bidders should seek information from theCompany and securities regulators on the reasons for the restrictions on the sale of the above-mentioned shares. The conditions for the release of the sales restriction shall be subject to the final decisions of the Company and regulators. Where a bidder pays a deposit and participates in the bid, the bidder shall be deemed to have a full understanding of the above-mentioned share sale restrictions. After completion of the bid and the transfer of ownership, the bidder shall bear the relevant risks caused by any of such share sale restriction not being released.

• 2. Bidders shall meet the qualifications for qualified investors for such disposal of shares, and shall abide by the relevant regulations on the reduction of shareholding of the Company upon completion of the transaction, and perform information disclosure obligations as required.

  Stock exchange participants and investors who own or rent trading units can log in to the Judicial Execution Platform through their configured accounts or submit bidding declarations through the offer channel designated by the relevant stock exchange. Investors who are eligible for offline subscription of new shares can log in to the Judicial Execution Platform (website:https://sf.uap.sse.com.cn/) through the configured account to apply for bidding. Other bidders may entrust participants of the relevant stock exchange to submit bidding declarations on their behalf.

• 3. The amount of shares of the Company already held by the bidder and the number of shares it bids shall not in aggregate exceed 30% of the number of issued shares of the Company. If the bidder's cumulative holding of the shares of the Company exceeds 30% due to participation in this bidding, it shall be handled in accordance with the relevant provisions of the Securities Law of the People's Republic of China*( ʕശɛ͏΍ձ਷ᗇՎج').

• 4. The disposal will be conducted through split trades. The minimum bidding declaration quantity for each bid is 5,000,000 shares, and the deposit corresponding to the minimum bidding declaration quantity is RMB700,000. The amount of deposit paid by the bidder shall match the maximum bidding declaration quantity. The deposit shall be paid to the designated account (Account Name: Shanghai Financial Court, Bank: Agricultural Bank of China, Shanghai Hubei Road Branch, Account Number: 6228400037191486769) from 15 March 2021 to 15:30 on 23 March 2021. The payment shall be made by remittance, and the relevant information of the actual bidder (including the contact person and contact information, the name of the securities account, the number of the stock account, and the number of the bid declared) shall be indicated in the remarks column of the remittance. The court will confirm the bidding qualification and the quantity of bidding declaration. The bid is invalid if the deposit is not paid or is not paid in full.

  After the results of the bidding are announced, the deposit already paid by the buyer of the subject will be automatically converted into a portion of the transaction amount. The deposit paid by the bidder who does not win the bid shall be returned to the original payment account within five business days in accordance with the original payment method. No interest shall accrue on the deposit.

The purchaser shall pay the difference (after deducting the deposit) of the transaction amount to the above designated account of the court within five business days after receiving the notice from the Shanghai Financial Court. If the payment is overdue, the Shanghai Financial Court may re-dispose of the shares and the deposit paid will not be refunded and the buyer may not participate in the bidding again.

• 5. The bidding time for bidders is from 9:30 to 11:30 and 13:00 to 15:30 on 26 March 2021. In respect of the remaining 200,000 shares, after the split, consultation will be made in turn with the buyers according to the bid price in the final matching result. If there are no bidders, the Shanghai Financial Court may dispose of them by other means.

  The bidding is automatically matched by the Judicial Execution Platform in accordance with the principle of "price first-quantity first-time first". After verification by the Shanghai Financial Court, the bidding result will be announced on the Judicial Execution Platform.

• 6. After the bid is completed and the buyer having paid all the remaining balance of the transaction, the Shanghai Financial Court will issue relevant legal documents in accordance with the bid price of the bidder to assist in the registration of transfer of shares in accordance with the relevant provisions of the laws and judicial interpretations.

  The specific matters of the judicial enforcement of the block trade of shares will be carried out in accordance with the "Operating Rules for the Judicial Assistance Execution Platform for Block Trade of Shares"* ( ɽٰ֚ୃ̡ج՘пੂБ̨̻዁Ъ஝ᇍ')."

III. RELEVANT RISK WARNINGS

1. As of the date of this announcement, Shanghai Hexia directly holds 45,204,390 A Shares, representing 8.25% of the total share capital of the Company. All of such A Shares have been subject to a subordinated freezing order. The number of A Shares subject to the current auction is 45,200,000 A Shares, representing 8.25% of the total share capital of the Company, and 99.99% of the shares of the Company directly held by Shanghai Hexia.

As of the date of this announcement, the 141,600,000 A Shares held by Mr. Xing Jiaxing, the de facto controller of the Company, have already been subject to judicial auction procedures. For details, please refer to the Company's announcement dated 31 January 2021. If the auction of all or a substantial portion of the auctioned shares are completed, each of Mr. Xing Jiaxing and Shanghai Hexia may cease to be a controlling shareholder (as defined under the Listing Rules) of the Company and a de facto controller of the Company under the Rules Governing the Listing of Shares on the Shanghai Stock Exchange ( ɪऎᗇՎʹ׸הٰୃɪ̹஝ۆ') (the "SSE Listing Rules").

• 2. The Company and Shanghai Hexia (the concert party of its de facto controller) remain independent in terms of aspects such as assets, business, and finances. This auction will not affect the normal production and operation of the Company, nor will it have any significant impact on the main business and ability to continue operation of the Company, nor will it cause the shareholding distribution of the Company to be unqualified for listing of A Shares.

• 3. This judicial disposal is still in the auction publicity stage, and the follow-up may involve other aspects such as bidding, payment, execution of legal procedures by the court, equity change and transfer. The auction result remains uncertain. The Company will pay close attention to the subsequent progress of the above-mentioned auctions, and will perform its information disclosure obligations in a timely manner in accordance with relevant requirements.

Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company.

By Order of the Board

Xinjiang La Chapelle Fashion Co., Ltd.

Mr. Wu Jinying

Chairman

Shanghai, the People's Republic of China

1 March 2021

As of the date of this announcement, the executive directors of the Company are Mr. Wu Jinying, Ms. Zhang Ying and Ms. Zhang Danling; the non-executive director of the Company is Mr. Yin Xinzai; the independent non-executive directors of the Company are Mr. Xing Jiangze, Ms. Wong Sze Wing and Mr. Zhu Xiaozhe.

* For identification purpose only.