Zhongguancun Science Tech Leasing : DISCLOSEABLE TRANSACTION FINANCE LEASE TRANSACTION

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中 關 村 科 技 租 賃 股 份 有 限 公 司

ZHONGGUANCUN SCIENCE-TECH LEASING CO., LTD.

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

(Stock Code: 1601)

DISCLOSEABLE TRANSACTION

FINANCE LEASE TRANSACTION

FINANCE LEASE AGREEMENT

The Board hereby announces that on July 24, 2020, the Company (as the Lessor) entered into the Finance Lease Agreement with the Lessee, pursuant to which (i) the Lessee would sell its own assets namely, the Leased Assets to the Lessor, at a consideration of RMB30,000,000; and (ii) the Lessor would lease back the Leased Assets to the Lessee for a term of 36 months with a total lease payment of RMB33,234,268, which under the Finance Lease Agreement shall include a finance lease principal of RMB30,000,000 and a finance lease interest income (inclusive of VAT) of RMB3,234,268.

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio under the Finance Lease Agreement is higher than 5% but lower than 25%, therefore, the transaction thereunder constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

BACKGROUND

The Board hereby announces that on July 24, 2020, the Company (as the Lessor) entered into the Finance Lease Agreement with the Lessee, pursuant to which (i) the Lessee would sell its own assets namely, the Leased Assets to the Lessor, at a consideration of RMB30,000,000; and (ii) the Lessor would lease back the Leased Assets to the Lessee for a term of 36 months with a total lease payment of RMB33,234,268, which under the Finance Lease Agreement shall include a finance lease principal of RMB30,000,000 and a finance lease interest income (inclusive of VAT) of RMB3,234,268.

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The table below sets out the details of the Finance Lease Agreement:

				Finance lease			Net book value
	Date of	Expiry date of	Finance lease	interest income			of Leased
	finance lease	financial lease	principal	(inclusive of	Security	Total lease	Assets
Finance Lease Agreement	agreement	agreement	amount	VAT)	deposits	payment	(Approx.)
			RMB	RMB	RMB	RMB	RMB
Finance Lease Agreement	July 24, 2020	July 23, 2023	30,000,000	3,234,268	1,800,000	33,234,268	56,395,320

FINANCE LEASE AGREEMENT

Principal terms of the Finance Lease Agreement are as follows:

Parties
Lessor:	the Company
Lessee:	a limited liability company established in the PRC, which is principally engaged in
	research and production of fertilizer.

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, the Lessee and its ultimate beneficial owner are all independent third parties of the Company and its connected persons (as defined in the Listing Rules).

Leased Assets

The Leased Assets are heating boiler, desulfurization and denitrification and other related heating equipment located in Shandong Province, the PRC, with a net book value of approximately RMB56,395,320.

The Lessee does not separately calculate the profits before and after tax of the Leased Assets. The transfer considerations to acquire the Leased Assets under the Finance Lease Agreement will be funded by the Company's internal resources.

Lease Period

The lease period of the Finance Lease Agreement is 36 months.

Lease Payment and Method of Payment

Pursuant to the Finance Lease Agreement, the lease payment comprises finance lease principal and finance lease interest income (inclusive of VAT). The finance lease principal is RMB30,000,000, the finance lease interest income (inclusive of VAT) is RMB3,234,268 (calculated based on the interest rate of 6.50% per annum), the total lease payment is RMB33,234,268, the Lessee shall pay the lease payment to the Lessor at the end of each quarter in instalments in accordance with the Finance Lease Agreement during the lease period.

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The terms of the Finance Lease Agreement, including transfer consideration for the Leased Assets, finance lease principal, finance lease interest income and other expenses under the Finance Lease Agreement, were determined upon arm's length negotiation between the Lessee and the Lessor with reference to net book values of the Leased Assets and prevailing market prices of the same category of finance lease products in the PRC.

Security Deposits

The Lessee agreed to pay the security deposit for the Finance Lease Agreement of RMB1,800,000 (bearing nil interests). When the last lease payment of the Finance Lease Agreement, the lease payment and other payables under the final payment will automatically be deducted from the deposit, and the Lessor will refund the Lessee the remaining amount (if any).

Ownership of the Leased Assets

During the lease period, the ownership of the Leased Assets shall be vested in the Lessor. If the Lessee has properly and fully performed all of its obligations under the Finance Lease Agreement, upon the expiry of the Finance Lease Agreement, the Lessor will transfer the Leased Assets to the Lessee at the consideration of RMB100 in nominal value.

Guarantee

The guarantee arrangements for the Finance Lease Agreement are set out below:

1. the ultimate beneficial owner of the Lessee provides joint and several liabilities guarantee for the debts of the Lessee under the Finance Lease Agreement;
2. a connected company under common control of the ultimate beneficial owner of the Lessee provides joint and several liabilities guarantee for the debts of the Lessee under the Finance Lease Agreement; and
3. the Lessee provides pledge of the income rights and pledge guarantee of account receivables from designated project.

REASONS FOR AND BENEFITS OF ENTERING INTO THE FINANCE LEASE AGREEMENT

The Company's principal activities are to provide finance leasing and advisory services to customers. The Finance Lease Agreement is entered into by the Company during its ordinary and usual course of business.

The Directors consider that entering into the Finance Lease Agreement will generate revenue and profit to the Company over the lease period and is consistent with the Company's business development strategy. Since the Finance Lease Agreement was entered into under normal commercial terms, the Directors are of the view that the terms under the Finance Lease Agreement are fair and reasonable and are in the interests of the Company and its shareholders as a whole.

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INFORMATION OF THE PARTIES

Information of the Company

The Company is a pioneer and a dedicated finance lease company in serving technology and new economy companies in China. As the sole finance lease platform under Zhongguancun Development Group Co., Ltd. ( 中關村發展集團股份有限公司), the Company offers efficient finance lease solutions and a variety of advisory services to satisfy technology and new economy companies' needs for financial services at different stages of their growth. The Company's finance lease solutions primarily take the form of direct lease and sale-and-leaseback. The Company also delivers a variety of advisory services, including policy advisory and management and business consulting, to help its customers achieve rapid growth.

Information of the Lessee

The Lessee is a limited liability company established in the PRC, which is principally engaged in research and production of fertilizer.

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio under the Finance Lease Agreement is higher than 5% but lower than 25%, therefore, the transaction thereunder constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following meanings:

"Board"	the board of directors of the Company
"Company"	Zhongguancun Science-Tech Leasing Co., Ltd. ( 中 關 村 科 技 租 賃 股
	份有限公司), a joint stock company incorporated under the laws of the
	PRC with limited liability, the H shares of which are listed on the Stock
	Exchange with stock code of 1601
"Director(s)"	the director(s) of the Company
"Finance Lease Agreement"	the finance lease agreement entered into between the Lessor and the
	Lessee on July 24, 2020
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"independent third party(ies)"	any individual or company not being the connected persons (as defined
	under the Listing Rules) of the Company, independent of the Company
	and its connected persons (as defined under the Listing Rules) and not
	connected with them

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"Leased Assets"	Heating boiler, desulfurization and denitrification and other related
	heating equipment located in Shandong Province, the PRC, with a net
	book value of approximately RMB56,395,320 under the Finance Lease
	Agreement
"Lessee"	Shandong Jinyimeng Shengtai Feiye Co., Ltd.* ( 山東金沂蒙生態肥業
	有限公司), a limited liability company established in the PRC, which is
	principally engaged in research and production of fertilizer. The ultimate
	beneficial owner of this company is ZHANG Lisheng* ( 張立省)
"Lessor"	the Company
"Listing Rules"	the Rules Governing the Listing of Securities on The Stock Exchange of
	Hong Kong Limited
"PRC" or "China"	the People's Republic of China, which, for the purpose of this
	announcement, excludes Hong Kong, the Macau Special Administrative
	Region of the PRC and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"VAT"	value-added tax

By order of the Board

Zhongguancun Science-Tech Leasing Co., Ltd.

DUAN Hongwei

Chairman

Beijing, the PRC, July 24, 2020

As at the date of this announcement, the Board comprises Mr. HE Rongfeng and Mr. HUANG Wen as executive Directors, Mr. DUAN Hongwei, Mr. LOU Yixiang, Mr. ZHANG Shuqing and Mr. LI Peng as non-executive Directors, and Mr. CHENG Dongyue, Mr. WU Tak Lung and Ms. LIN Zhen as independent non-executive Directors.

• For identification purposes only

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