China U Ton : MEMORANDUM OF UNDERSTANDING IN RELATION TO THE POSSIBLE ACQUISITION (in PDF)

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CHINA U-TON HOLDINGS LIMITED ʕ਷ᎴஷછٰϞࠢʮ̡

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6168)

MEMORANDUM OF UNDERSTANDING

IN RELATION TO THE POSSIBLE ACQUISITION

This announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Listing Rules and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

THE MOU

The Board announces that on 21 December 2017 (after trading hours), the Company and the Vendors entered into the MOU in relation to the Possible Acquisition of 60% equity interest in the Target Company.

The Possible Acquisition is subject to, among others, further negotiation concerning the entering into of the Formal Agreement. As at the date of this announcement, the terms and conditions of the Formal Agreement are yet to be finalized or agreed between the Company and the Vendors. As such, the Possible Acquisition may or may not proceed.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company. The Company will make further announcement in respect of the Possible Acquisition as and when appropriate in accordance with the Listing Rules.

This announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Listing Rules and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

THE MOU

On 21 December 2017 (after trading hours), the Company and the Vendor entered into the MOU in relation to the Possible Acquisition of a 60% equity interest in the Target Company. Details of the MOU are set out below.

Date: 21 December 2017

Parties: (i) the Company; and

• (ii) the Vendors

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, each of the Vendors is a Independent Third Party.

Subject matter to be acquired

Subject to the parties entering into the Formal Agreement, the Vendors intended to sell and the Company intended to acquire 60% equity interest in the Target Company.

Consideration

The exact amount of the consideration, the manner and the method of payment of the consideration for the Possible Acquisition will be negotiated between the parties to the MOU based on the results of the due diligence investigation to be conducted by the Company on the Target Company and shall be subject to the terms and conditions of the Formal Agreement which may or may not be entered into by the parties to the MOU in relation to the Possible Acquisition.

Exclusivity Period

The Vendors agreed that they will not and will procure that the Target Company and its directors, officers, employees, representatives and agents not to, directly or indirectly, for a period of 180 days from the date of the MOU or such other date as agreed between the Company and the Vendor, (i) solicit, initiate or encourage enquiries or offers from; or (ii) initiate or continue negotiations or discussions withor furnish any information to; or (iii) enter into any agreement or statement of intent or understanding with, any person or entity other than the Company with respect to the sale or other disposition of the equity interest in or the sale, subscription, or allotment of any part thereof or any other shares of the Target Company. Should the Target Company (and each of its existing shareholders) or the Vendors receive any respective inquiries or invitation, the Company would be informed immediately.

Due diligence

The Company shall conduct due diligence in respect of the Possible Acquisition and the Vendors shall undertake to assist and procure the Target Company to assist in ensuring smooth proceeding of the due diligence within the Exclusivity Period.

Binding effect

Save for the provisions relating to exclusivity, confidentiality, and governing law and jurisdiction, the provisions of the MOU are not legally binding.

INFORMATION ON THE TARGET COMPANY

As advised by the Vendors, the Target Company is a limited liability company established in the PRC in August 2015. The Target Company primarily act as the exclusive service provider of WeChat pay platform and its related services under the area of education, medical, transportation, commercial, tourist and public utilities in Fuzhou authorized by Shenzhen Tencent Computer Systems Co., Ltd.* (ଉέ̹ᙜৃ ࠇၑዚӻ୕Ϟࠢʮ̡) and Tenpay Payment Technology Company Limited* (ৌ˹ஷ ˕˹߅ҦϞࠢʮ̡).

REASONS AND BENEFITS FOR THE POSSIBLE ACQUISITION

The Company is a company incorporated in the Cayman Islands and listed on the main board of the Hong Kong Stock Exchange. The principal business of the Company and its subsidiaries include the provision of deployment services of optical fibers in the PRC. The Directors are of the view that the Proposed Acquisition provides opportunities to the Company to diversify its existing business.

The Board consider that the terms of the MOU are fair and reasonable and that the Possible Acquisition is in the interest of the Company and shareholders of the

Company as a whole.

The Possible Acquisition is subject to, among others, further negotiation concerning the entering into of the Formal Agreement. As at the date of this announcement, the terms and conditions of the Formal Agreement are yet to be finalized or agreed between the Company and the Vendors. As such, the Possible Acquisition may or may not proceed.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company. The Company will make further announcement in respect of the Possible Acquisition as and when appropriate in accordance with the Listing Rules.

Definitions

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

"Board"	the board of Directors
"Business Day(s)"	a day (excluding Saturday, Sunday, public holiday or any
day on which a tropical cyclone warning no. 8 or above
or a "black" rainstorm warning is hoisted between 9:00
a.m. and 5:00 p.m. in Hong Kong) on which licensed
banks in Hong Kong are generally open for business
throughout their normal business hours
"Company"	China U-ton Holdings Limited (ʕ਷ᎴஷછٰϞࠢʮ̡),
a company incorporated in the Cayman Islands with
limited liability, the Shares of which are listed on the
Main Board (Stock Code: 6168)
"Director(s)"	the director(s) of the Company
"Exclusivity Period"	the exclusivity period of 180 days from the date of the or
such other date agreed by the Company and the Vendors
"Formal Agreement"	the formal sale and purchase agreement for the Possible
Acquisition which may or may not be entered into by the
Company and the Vendors
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollar(s), the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the
PRC

"Independent Third	independent third party(ies) who is/are not connected
Party(ies)"	person(s) (as defined under the Listing Rules) of the
Company and is/are independent of and not connected
with the Company and Directors, chief executives,
controlling shareholders and substantial shareholders of
the Company or any of its subsidiaries or their respective
associates
"Listing Rules"	the Rules Governing the Listing of Securities on the
Stock Exchange
"Main Board"	Main Board of the Stock Exchange
"MOU"	the Memorandum of Understanding dated 21 December
2017 entered into by the Company and the Vendors
setting out the preliminary understanding for the Possible
Acquisition
"Possible Acquisition"	the possible acquisition of 60% equity interest in the
Target Company by the Company from the Vendor
"PRC"	the People's Republic of China which, for the purposes of
this announcement, excludes Hong Kong, Macau and
Taiwan
"Target Company"	Fujian Chuangjie Information Technology Limited *
(၅ܔ௴௫ڦࢹ߅ҦϞࠢʮ̡ ), a limited liability
company which established in the PRC
"Vendor(s)"	Mr. Wang Jia Ming, Ms. Yang Lin Lin, Mr. Huang Hao
and Mr. Chen Jie
"%"	per cent

By order of the Board of China U-Ton Holdings Limited

Jiang Changqing

Chairman

Hong Kong, 21 December 2017

As at the date of this announcement, the executive directors of the Company are Mr. Jiang Changqing, Ms. Guo Aru, Mr. Li Qingli, Mr. Zhao Feng and Ms. Ji Huifang; the non-executive director of the Company is Mr. Ge Lingyue; the independent non-executive directors of the Company are Mr. Meng Fanlin, Mr. Wang Haiyu and Ms. Li Xiaohui.

* For identification purpose only and should not be regarded as the official English translation of the Chinese names. In the event of any inconsistency, the Chinese name prevails