Xinjiang La Chapelle Fashion : UPDATE ANNOUNCEMENT ON THE PROGRESS OF THE JUDICIAL AUCTION OF THE A SHARES HELD BY CONTROLLING SHAREHOLDER

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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)

UPDATE ANNOUNCEMENT ON THE PROGRESS OF THE JUDICIAL AUCTION

OF THE A SHARES HELD BY CONTROLLING SHAREHOLDER

This announcement is made by Xinjiang La Chapelle Fashion Co., Ltd. (the "Company") 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 Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ("SFO").

As disclosed in the announcement of the Company dated 31 January 2021 in relation to the receipt of a notice of forced auction of the 141,600,000 A shares of the Company held by Mr. Xing Jiaxing (the "A Shares"), since Mr. Xing Jiaxing ("Mr. Xing") did not perform certain obligations under the Notarised Documents of Creditor's Rights arising from share pledge repurchase transactions in relation to the A Shares, the Shanghai Financial Court auctioned the A Shares (all being restricted shares) on the judicial assistance execution platform of the Shanghai Stock Exchange ("SSE") on 5 March 2021. According to the auction results displayed on the judicial assistance execution platform of the SSE, all of the 141,600,000 A Shares were successfully bid.

I. BIDDING RESULTS OF THE JUDICIAL AUCTION

On 5 March 2021, the Company learned from the "Result Announcement on the 141.6 Million Restricted Shares by *ST Laxia (stock code: 603157)"* ( *STזࢀ€ٰୃ˾ᇁj60315714,160ຬٰ ࠢਯٰϓʹഐ؈ʮѓ') through the judicial assistance execution platform of the SSE and from the "Notice of the Results of Disposal of Shares through Auction" (2020) Hu 74 Zhi No.: 425)*€( 2020 လ74ੂ425໮ٰୃஈໄᘩርഐ؈ஷࣣٝ') received from the Shanghai Financial Court the following:

In the process of judicial assistance execution, Beijing Xiya Yijia Brand Management Co., Ltd.* (̏ ԯГඩВ࢕ۜ೐၍ଣϞࠢʮ̡) through bidding account number B883***321 declared to bid for 40 million shares at a unit price of RMB2.99 per share, and the bidding transaction was completed at a total consideration of RMB119,600,000;

Everbright Tongrong Financial Management Consulting (Beijing) Co., Ltd.* (Έɽஷፄ၍ଣፔ ༔€̏ԯϞࠢʮ̡) through bidding account number B883***363 declared to bid for 20 million shares at a unit price of RMB2.99 per share, and the bidding transaction was completed at a total consideration of RMB59,800,000;

Xinjiang Xiya Yijia Brand Management Co., Ltd.* (อᖛГඩВ࢕ۜ೐၍ଣϞࠢʮ̡) through bidding account number B883***409 declared to bid for 20 million shares at a unit price of RMB2.51 per share, and the bidding transaction was completed at a total consideration of RMB50,200,000;

Shanghai Qijin Enterprise Management Partnership LLP* (ɪऎՉᎀΆุ၍ଣΥྫΆุ€ϞࠢΥ ྫ) through bidding account number B883***609 declared to bid for 40 million shares at a unit price of RMB1.31 per share, and the bidding transaction was completed at a total consideration of RMB52,400,000;

Shanghai Wensheng Asset Management Co., Ltd.* (ɪऎ˖ସ༟ପ၍ଣٰ΅Ϟࠢʮ̡) through bidding account number B883***927 declared to bid for 40 million shares at a unit price of RMB1.31 per share, and the bidding transaction was completed for 21.6 million shares at a total consideration of RMB28,296,000.

According to the above-mentioned bidding results, all of the 141,600,000 A Shares have been bid.

The above results are only the bidding results of bidders during the share disposal process, which still involves various aspects such as the payment of the difference between the relevant transaction price and the deposit, the court's issuance of execution rulings, and completion of share transfers through registration. As a result, the final results remain uncertain. The Shanghai Financial Court has notified the above-mentioned bidders to pay the difference between the relevant transaction price and the deposit to the designated account of the Shanghai Financial Court on or before 13 March 2021 in accordance with the requirements of the Notice of Judicial Disposal of Shares* ( ̡ جஈໄٰୃʮѓ'). The final results of the share disposal are therefore subject to the execution rulings issued by the Shanghai Financial Court. Upon completion of the transfer of shares and registration, each of Mr. Xing and Shanghai Hexia may cease to be a controlling shareholder (as defined under the Listing Rules) of the Company, and Mr. Xing may cease to be 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").

Publicly available information online shows that, Beijing Xiya Yijia Brand Management Co., Ltd.* (̏ԯГඩВ࢕ۜ೐၍ଣϞࠢʮ̡), Everbright Tongrong Management Consulting (Beijing) Co., Ltd.* (Έɽஷፄ၍ଣፔ༔€̏ԯϞࠢʮ̡), and Xinjiang Xiya Yijia Brand Management Co., Ltd.* (อᖛГඩВ࢕ۜ೐၍ଣϞࠢʮ̡) may be controlled by the same natural person (Mr. Wang Guanghui* (ˮΈሾ΋͛)). These three bidders collectively bid for 80 million of such A Shares. On the other hand, Shanghai Wensheng Asset Management Co., Ltd.* (ɪऎ˖ସ༟ପ၍ଣٰ΅Ϟࠢʮ ̡) indirectly holds 100% of Shanghai Qijin Enterprise Management Partnership (LLP)* (ɪऎՉ ᎀΆุ၍ଣΥྫΆุ€ϞࠢΥྫ). These two bidders collectively bid for a total of 61.6 million of such A Shares.

As at the date of this announcement, save as disclosed above, the Company is not aware of any other relationship between/among the bidders, or whether any of them are concert parties under the Chinese Administrative Measures for the Takeovers of Listed Companies* ( ɪ̹ʮ̡ϗᒅ၍ଣ፬ ج'), or whether any of them are parties acting in concert under the Hong Kong Code on Takeovers and Mergers.

II. IMPACT ON THE COMPANY AND RISK WARNINGS

• 1. As at the date of this announcement, Mr. Xing directly holds 141,874,425 A shares in the Company, representing 25.91% of the total issued share capital of the Company. Shanghai Hexia Investment Co., Ltd. ("Shanghai Hexia"), the party acting in concert with Mr. Xing, holds 45,204,390 A shares in the Company, representing 8.25% of the total issued share capital of the Company. Mr. Xing and Shanghai Hexia collectively hold a total of 187,078,815 A shares of the Company, representing 34.16% of the total issued share capital of the Company. If the auction of all or a substantial portion of the A Shares is completed, each of Mr. Xing and Shanghai Hexia may cease to be a controlling shareholder (as defined under the Listing Rules) of the Company, and Mr. Xing may cease to be a de facto controller of the Company under the SSE Listing Rules.

• 2. This judicial auction has already delivered bidding results. However, since this share disposal process will still involve various aspects such as the payment of the difference between the relevant transaction price and the deposit, the court's issuance of execution rulings, and completion of share transfers through registration, the final results of this action remain uncertain.

• 3. The judicial disposal of the 45,200,000 A shares held by Shanghai Hexia, the concert party of Mr. Xing, will be publicly conducted on the judicial assistance execution platform of the SSE for block trade of shares on 26 March 2021. If, according to the final results of the current auction and the auction of the A shares of the Company held by Shanghai Hexia, there will not be any single shareholder of the Company or a group of shareholders of the Company who is entitled to exercise or control the exercise of 30% or more of the voting power at the general meetings of the Company or who is in a position to control the composition of a majority of the board of directors of the Company, the Company will not have a controlling shareholder (as defined under the Listing Rules) or a de facto controller (as defined under the SSE Listing Rules).

• 4. This auction will not affect the normal production and operation of the Company, will not adversely affect the Company's principal business and its ability to continue as a going concern, and will not render the Company's shareholding distribution unqualified for listing under the SSE Listing Rules.

• 5. The Company will closely monitor the subsequent progress of this auction, and perform its information disclosure obligations in a timely manner in accordance with relevant rules and regulations.

Shareholders and potential investors of the Company are advised to 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

7 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 purposes only