CHTC Fong Industries : Announcement pursuant to Rule 13.18 of the Listing Rules

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CHTC FONG'S INDUSTRIES COMPANY LIMITED 㛬˂ͭڦʈุϞࠢʮ̡

(Incorporated in Bermuda with limited liability)

(Stock Code: 641)

ANNOUNCEMENT PURSUANT TO RULE 13.18 OF THE LISTING RULES

This announcement is made by the board of directors (the "Board") of CHTC Fong's Industries Company Limited (the "Company") pursuant to Rule 13.18 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

Reference is made to the announcement of the Company dated 13 September 2016 in relation to the banking facilities granted to certain indirect wholly-owned subsidiaries of the Company by a bank (the "Bank"), the terms and conditions of such banking facilities contain a specific performance obligation imposed on the controlling shareholder of the Company.

On 22 January 2018, Fong's National Engineering Company, Limited (the "Borrower"), an indirect wholly-owned subsidiary of the Company, accepted the revised banking facilities (the "Facilities") granted to the Borrower under the terms and conditions of the Bank's facility letter dated 3 January 2018 (the "Facility Letter"). The Facilities comprise two term loans and other trade related facilities up to an aggregate maximum amount of HK$451 million with details as follows:

(i) an outstanding 3-year term loan facility of HK$50 million (the principal loan amount was HK$100 million) and was advanced under the facility letter dated 2 June 2015.

The principal term loan was drawn down in October 2015 and shall be repayable in full by four semi-annually instalments commencing eighteen months after the date of drawdown;

(ii) an outstanding 3-year term loan facility of HK$250 million and was advanced under the facility letter dated 12 July 2016. The term loan has been drawn down in two tranches during the period from September 2016 to June 2017 and shall be repayable in full by seven quarterly instalments commencing eighteen months after the date of first drawdown of each tranche; and

(iii) other trade related facilities up to HK$151 million.

Pursuant to the terms and conditions of the Facility Letter, ʕ਷㛬˂ණྠϞࠢʮ̡ (China Hi-Tech Group Corporation), the controlling shareholder of the Company, shall at all times maintain an aggregate beneficial ownership (directly or indirectly) of not less than 51% in the issued share capital of the Company throughout the life of the Facility Letter (the "Specific Performance Obligation"). Failure to comply with the requirement will trigger an event of default under the Facility Letter. As at the date of this announcement, ʕ਷㛬˂ණྠϞࠢʮ ̡ (China Hi-Tech Group Corporation) beneficially owns approximately 55.94% of the issued share capital of the Company.

In accordance with the requirements under Rule 13.21 of the Listing Rules, the Company will make disclosures in its subsequent interim and annual reports for so long as circumstances giving rise to the Specific Performance Obligation of the controlling shareholder continue to exist.

By order of the Board

CHTC Fong's Industries Company Limited

C.K. Lee

Company Secretary

Hong Kong, 22 January 2018

As at the date of this announcement, the Company's Executive Directors are Mr. Ye Maoxin (Chairman), Mr. Ji Xin (Chief Executive Officer) and Mr. Du Qianyi (Chief Financial Officer); the Non-executive Director is Mr. Fong Kwok Leung, Kevin; and the Independent Non-executive Directors are Mr. Ying Wei, Dr. Yuen Ming Fai and Mr. Li Jianxin.