China Greenfresh : SUPPLEMENTAL ANNOUNCEMENT - PLACING OF NEW SHARES UNDER GENERAL MANDATE

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 however arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement appears for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

CHINA GREENFRESH GROUP CO., LTD.

中國綠寶集團有限公司*

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6183)

SUPPLEMENTAL ANNOUNCEMENT

PLACING OF NEW SHARES UNDER GENERAL MANDATE

Reference is made to the announcement of China Greenfresh Group Co., Ltd. (the "Company") dated 25 November 2019 (the "Announcement") in relation to placing of new shares under general mandate. Unless otherwise specified, capitalized terms used herein shall have the same meanings as defined in the Announcement.

The Board wishes to provide potential investors and Shareholders with the following further information in relation to the Placing.

FURTHER INFORMATION ON THE PLACEES

As disclosed in the Announcement, the Company has conditionally agreed to issue and allot an aggregate of 233,511,246 Placing Shares to the Placees, further details of which are set out below:

1. 23,827,678 Placing Shares (representing approximately 1.86% of the existing issued share capital of the Company as at the date of this announcement) to each of :
   - Xiao Fenghai (肖風海);

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1. • Cai Yang (蔡揚);
   • Chen Yumei (陳玉美);
   • Zhu Yufang (朱玉芳); and
   • Yang Yixuan (楊藝璇); and
2. 57,186,428 Placing Shares (representing approximately 4.45% of the existing issued share capital of the Company as at the date of this announcement) to each of:
3. • Shenzhen Heshuo Investment Management & Consulting Co., Ltd.* (深圳和碩投 資管理諮詢有限公司) ("Heshuo Investment"), of which the ultimate beneficial owners are Ouyang Qiangen (歐陽前根, as to 60% interest) and Wu Fulong (吳福 龍, as to 40% interest) as at the date of this announcement; and
   • Xiamen Municipality Siming District Huipengfu Investment Partnership (Limited Partnership)* (廈門市思明區匯朋富投資合夥企業（有限合夥）) ("Huipengfu"), of which the ultimate beneficial owners are Yan Kengquan (顏坑泉, as to 70% interest) and Zheneg Afu (鄭阿福, as to 30% interest) as at the date of this announcement.

As far as the Directors are aware, the Placees and their ultimate beneficial owners are third parties independent of the Group and its connected persons.

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FURTHER INFORMATION ON EFFECTS ON SHAREHOLDING STRUCTURE OF

THE COMPANY

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, the existing shareholding structure of the Company as at the date of this announcement and the effect on the shareholding structure of the Company upon completion of the Placing (assuming that the Placing is fully completed and there is no other change in the shareholding structure of the Company before the allotment and issue of the Placing Shares under the Placing) are set out as below:

	As at the date of	Immediately upon
	this announcement	completion of the Placing
	No. of Shares	Approximate	No. of Shares	Approximate
			%			%
Zheng Songhui (Note 1)	566,297,554		44.09		566,297,554		37.31
Zheng Tianming (Note 2)	15,180,610		1.18		15,180,610		1.00
Xiao Fenghai	-	-	23,827,678		1.57
Cai Yang	-	-	23,827,678		1.57
Chen Yumei	-	-	23,827,678		1.57
Zhu Yufang	-	-	23,827,678		1.57
Yang Yixuan	-	-	23,827,678		1.57
Heshuo Investment	-	-	57,186,428		3.77
Huipengfu	-	-	57,186,428		3.77
Public Shareholders	702,905,757		54.73		702,905,757		46.31
Total	1,284,383,921		100		1,517,895,167		100

Notes:

1. 4,580,000 Shares are directly held by Mr. Zheng Songhui. 561,717,554 Shares are indirectly held by Mr. Zheng Songhui through his wholly-owned Song Rising Co., Ltd ("Song Rising") and Grand Ample Limited ("Grand Ample"), and Song Rising and Grand Ample directly owned 527,027,320 and 34,690,234 Shares respectively.
2. 1,760,000 Shares are directly held by Mr. Zheng Tianming. 13,420,610 Shares are indirectly held by Mr. Zheng Tianming through his wholly-owned Sunny Foods Co., Ltd ("Sunny Foods"), and Sunny Foods directly owned 13,420,610 Shares.

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FURTHER INFORMATION ON COMPLETION OF THE PLACING

As disclosed in the Announcement, if any of the conditions in the Placing Agreements has not been fulfilled on or before 11 January 2020 (or such other date as the Placees may agree with the Company, the "Long Stop Date"), the obligations of the Company and the Placees under the Placing Agreements shall cease and terminate. The Long Stop Date was determined taking into account, among other things, the consideration that (i) it is expected to be time-consuming for the Placees to open bank account in Hong Kong due to onerous anti-money laundering measures taken by the banks in Hong Kong; and (ii) it is expected to be time-consuming for the Placees to remit funds in Renminbi from mainland China to Hong Kong into Hong Kong dollars due to the foreign exchange administrative measures in mainland China. As the Long Stop Date will increase the certainty of successful closing of the Placing, the Directors are of the view that the Long Stop Date is in the interest of the Company and the Shareholders as a whole.

As per the Placing Agreements, completion of the Placing shall take place on the third Business Day immediately after the fulfilment of the conditions in the Placing Agreements or such other date as the Company and the Placees may agree. Based on the existing overall situations, the Company anticipates that completion will take place on or before 31 December 2019. Further announcement will be made by the Company in relation to the completion of the Placing.

FURTHER DETAILS ON THE RATIONALE OF THE PLACING AND USE OF PROCEEDS

The Company has carefully considered and reviewed its existing financial resources. As at 31 October 2019, the cash and bank balances of the Group amounted to approximately RMB1.35 billion, of which RMB1.18 billion has been set aside for the following use:

1. approximately RMB0.30 billion held by the Group has been budgeted for developing Guangxi Biological Technology Food Industry Park* (廣西生物技術食品工業園) and Zhangzhou Biological Technology Food Industry Park* (漳州生物技術食品工業園), and is expected to be utilized by 31 December 2020;
2. approximately RMB0.18 billion has been set aside for potential equity acquisition, and is expected to be utilized by 31 January 2020;
3. approximately RMB0.20 billion has been budgeted for ongoing projects involving Canadian Milk Manufacturing Inc., and is expected to be utilized by 31 January 2020;
4. approximately RMB0.40 billion has been set aside as working capital for daily operations, taking into account the Group's average monthly cash outflow from operating activities (being approximately RMB0.10 billion) and the repayment cycles of most of the Group's customers (exceeding 60 days); and
5. approximately RMB0.10 billion has been set aside for repayment of bank loans.

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Accordingly, only RMB0.17 billion is immediately deployable by the Company.

In light of the above and in consideration of the considerations as disclosed in the Announcement, the Directors are of the view that the Placing represents a fair and reasonable means to raise additional funds, and is in the interests of the Company and the Shareholders as a whole.

As disclosed in the Announcement, the gross proceeds of the Placing will be approximately HK$67,017,727.602, comprising of :

1. HK$6,838,543.586 payable by each of Xiao Fenghai, Cai Yang, Chen Yumei, Zhu Yufang and Yang Yixuan; and
2. HK$16,412,504.836 payable by each of Heshuo Investment and Huipenghu.

Among the HK$66,517,727.602 of net proceeds from the Placing, (i) approximately HK$30,000,000 will be allocated for developing and promoting the Group's overseas healthy food business, covering salary expenses, office rentals, business trip expenses, legal expenses and other professional expenses; (ii) approximately HK$20,000,000 will be allocated for developing the Group's international trading business, covering the expenses on domestic and overseas trade exhibitions, exhibition-related services, brand management services, and inspection and assessment of upstream suppliers; and (iii) approximately HK$16,517,727.602 will be allocated for advertising and promoting the Group's healthcare products.

As completion of the Placing is subject to fulfilment of the conditions as set out in the Placing Agreements, the Placing may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

By order of the Board

CHINA GREENFRESH GROUP CO., LTD.

Zheng Songhui

Chairman

Hong Kong, 29 November 2019

As at the date of this announcement, the Board comprises Mr. Zheng Songhui and Mr. Zheng Tianming as executive Directors; Ms. Zhang Lin and Mr. Zheng Kangbin as non-executive Directors; and Mr. Li Wai Kwan, Mr. Lou Robert Hsiu-sung and Mr. Cheng Hiu Yung as independent non-executive Directors.

• For identification purpose only

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