Sino Haijing : 26 Jan 2017 Discloseable Transaction Acquisition of 100% Shareholding Interests in the Target Company

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SINO HAIJING HOLDINGS LIMITED

中國海景控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01106) DISCLOSEABLE TRANSACTION ACQUISITION OF 100% SHAREHOLDING INTERESTS IN THE TARGET COMPANY THE ACQUISITION

On 26 January 2017 (after trading hours), the Purchaser (a wholly-owned subsidiary of the Company) and the Vendors, all being Independent Third Parties, entered into the Sale and Purchase Agreement pursuant to which the Vendors have agreed conditionally to sell, and the Purchaser has conditionally agreed to purchase, the Sale Shares (representing 100% of the issued share capital of the Target Company) at the Consideration of RMB160,000,000 (HK$179,200,000).

LISTING RULES IMPLICATIONS ON THE ACQUISITION

As certain applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the Acquisition exceeds 5% but is less than 25%, the Acquisition constitutes a discloseable transaction for the Company and is subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.

INTRODUCTION

The Board is pleased to announce that on 26 January 2017 (after trading hours), the Purchaser (a wholly-owned subsidiary of the Company) and the Vendors, all being Independent Third Party, entered into the Sale and Purchase Agreement pursuant to which the Vendors have conditionally agreed to sell, and the Purchaser has conditionally agreed to purchase, the Sale Shares (representing 100% of the issued share capital of the Target Company) at the Consideration of RMB160,000,000 (HK$179,200,000).

Following Completion, the Target Company will become a wholly-owned subsidiary of the Company and the financial results of the Target Group will be consolidated into the financial statements of the Group.

THE SALE AND PURCHASE AGREEMENT

Date: 26 January 2017 (after trading hours)

Parties: Vendors: Vstar Holdings Limited (Vendor A);

Jumbo Keen Group Limited (Vendor B);

Star Wise Pacific Limited (Vendor C); and Vantage Frontier Limited (Vendor D)

Vendors'

Guarantors: Xu Dongyu* (徐東宇) (Vendor's Guarantor A), Zhou Xudong* ( 周旭東) ( Vendor's Guarantor B), Guo Jinli* ( 郭金力) (Vendor's Guarantor C), Zhang Tong* (張彤) (Vendor's Guarantor D)

Purchaser: Golden Comfort Investment Limited, a wholly-owned subsidiary of the Company

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of the Vendors, their ultimate beneficial owners and their respective associates is an Independent Third Party. Vendor A is wholly-owned by Xu Dongyu* (徐東宇), Vendor B is wholly-owned by Zhou Xudong* (周旭東) Vendor C is wholly-owned by Guo Jinli* (郭金力) and Vendor D is wholly-owned by Zhang Tong* (張彤).

Assets to be acquired

The Target Company is a company incorporated in the British Virgin Islands with limited liability, the entire issued share capital of which was owned as to 25%, 48.3%, 20.7% and 6% by Vendor A, Vendor B, Vendor C and Vendor D, respectively, immediately prior to the signing of the Sale and Purchase Agreement.

* For identification purpose only

Under the Acquisition, the Purchaser agreed to acquire, and the Vendors agreed to sell, 100% of the entire issued share capital of the Target Company. According to the information provided by the Vendors, the Target Company owns the entire issued share capital of Yalu International, a company incorporated in Hong Kong with limited liability. Under the terms of the Sale and Purchase Agreement, (a) Yalu International has entered into a long-term aircraft charter contract with Mega International Travel (the "Charter Contract"); (b) Yalu International has entered into an outbound tourism and hospitality contract with Mega International Travel (the "Hospitality Contract"); and (c) Yalu International has entered into a long-term consultancy contract with Mega International Travel (the "Consultancy Contract"); and the Vendors undertook to procure: (a) Yalu International to establish a wholly-owned subsidiary in the PRC ("Yalu China"); and (b) Yalu International to assign the rights and obligations of the Consultancy Contract upon the establishment of Yalu China, in each case prior to Completion.

Mega International Travel is a company incorporated in the PRC with limited liability and its principal businesses involve domestic traveling, inbound and outbound tourism.

Consideration

The Consideration for the Acquisition amounts to RMB160,000,000 (HK$179,200,000), which shall be paid by the Purchaser to the Vendors in the following manner:

1. a refundable earnest money of RMB10,000,000 (the "Earnest Money") was already paid by the Company to the Vendors (or their designated recipients) within three business days after the signing of the MOU, as disclosed in the Company's announcement dated 2 November 2016;

2. HK$56,000,000 (RMB50,000,000) shall be payable upon Completion, which shall be settled through the allotment and issue by the Company of 280,000,000 Shares to the Vendors on a pro rata basis in proportion to their shareholdings in the Target Company prior to the Acquisition (the "First Tranche Consideration Shares"); and

3. HK$112,000,000 (RMB100,000,000) shall be payable upon Completion, which shall be settled through the allotment and issue by the Company of 560,000,000 Shares to the Vendors on a pro rata basis in proportion to their shareholdings in the Target Company prior to the Acquisition (the "Second Tranche Consideration Shares") and deposited by way of escrow with a law firm in Hong Kong appointed by the Company (the "Escrow Agent") pending the determination on satisfaction of the Profit Guarantee.

The Consideration was arrived at after arm's length negotiations between the Vendors and the Company after taking into account, among others, (i) the future prospect of the Target Group; and (ii) the preliminary appraised value of the Sale Shares of RMB160 million as at 31 October 2016 adopting discounted cash flow approach prepared by APAC Asset Valuation and Consulting Limited, an independent professional valuer.

Consideration Shares

The 840,000,000 Consideration Shares represent approximately 8.1% of the existing issued share capital of the Company of 10,352,800,252 Shares as at the date of this announcement, and approximately 7.5% of the issued share capital of the Company as enlarged by the allotment and issue of the Consideration Shares (assuming that there is no other change in the issued share capital of the Company other than the issue of the Consideration Shares since the date of this announcement up to the date of the Completion). The aggregate nominal value of the 840,000,000 Consideration Shares is HK$10,500,000.

The issue price of approximately HK$0.20 per Consideration Share represents:

1. a premium of approximately 5.3% to the closing price of HK$0.190 per Share as quoted on the Stock Exchange as at the date of this announcement;

2. a premium of approximately 4.9% to the average closing price of HK$0.191 per Share as quoted on the Stock Exchange for the five consecutive trading days prior to the date of this announcement.

The issue price of the Consideration Shares was determined after arm's length negotiations between the Company and the Vendors having taken into account the average closing price of the Shares for the five consecutive trading days immediately prior to the date of the Sale and Purchase Agreement.

The Consideration Shares, when allotted and issued, will rank pari passu in all respects with each others and with the Shares in issue on the date of allotment and issue of the Consideration Shares.

Under the Sale and Purchase Agreement, there is no restriction on the ability of the Vendors to sell or dispose of any of the Consideration Shares after their allotment and issue.

An application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.