Chanjet Information Technology : CONNECTED TRANSACTIONS - SALE OF DOMESTIC SHARES FOR THE IMPLEMENTATION OF THE EMPLOYEE TRUST BENEFIT SCHEME

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暢 捷 通 信 息 技 術 股 份 有 限 公 司

CHANJET INFORMATION TECHNOLOGY COMPANY LIMITED*

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

(Stock Code: 1588)

CONNECTED TRANSACTIONS

SALE OF DOMESTIC SHARES FOR THE IMPLEMENTATION OF

THE EMPLOYEE TRUST BENEFIT SCHEME

Reference is made to the announcements of the Company dated 13 April 2015 and 8 June 2015, the circular of the Company dated 23 April 2015 in relation to, among other things, the adoption of the Employee Trust Benefit Scheme, and the announcements of the Company dated 6 December 2018 and 5 June 2019 in relation to, among other things, the sale of Domestic Shares for the implementation of the Employee Trust Benefit Scheme.

THE EQUITY TRANSFER AGREEMENT VI

On 6 December 2018, National Trust, entrusted by the Company, entered into the Equity Transfer Agreement VI with Chuangxin Investment, pursuant to which National Trust agreed to sell 250,000 Domestic Shares held by National Trust to Chuangxin Investment. The aggregate consideration of the transactions contemplated under the Equity Transfer Agreement VI is RMB2,170,000.

THE EQUITY TRANSFER AGREEMENT VII

On 6 December 2018, Hwabao Trust, entrusted by the Company, entered into the Equity Transfer Agreement VII with Chuangxin Investment, pursuant to which Hwabao Trust agreed to sell 1,030,000 Domestic Shares held by Hwabao Trust to Chuangxin Investment. The aggregate consideration of the transactions contemplated under the Equity Transfer Agreement VII is RMB8,940,400.

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THE EQUITY TRANSFER AGREEMENT VIII

On 5 June 2019, National Trust, entrusted by the Company, entered into the Equity Transfer Agreement VIII with Chuangxin Investment, pursuant to which National Trust agreed to sell 375,000 Domestic Shares held by National Trust to Chuangxin Investment. The aggregate consideration of the transactions contemplated under the Equity Transfer Agreement VIII is RMB3,180,000.

THE EQUITY TRANSFER AGREEMENT IX

On 6 December 2019, Hwabao Trust, entrusted by the Company, entered into the Equity Transfer Agreement IX with Yonyou Up, pursuant to which Hwabao Trust agreed to sell 450,000 Domestic Shares held by Hwabao Trust to Yonyou Up. The aggregate consideration of the transactions contemplated under the Equity Transfer Agreement IX is RMB3,393,000.

IMPLICATIONS UNDER THE HONG KONG LISTING RULES

Each of Hwabao Trust and National Trust has been entrusted by the Company to set up trusts for the implementation of the Scheme. Each of Chuangxin Investment and Yonyou Up is a subsidiary of the Parent, the controlling shareholder of the Company, and therefore a connected person of the Company.

As the Equity Transfer Agreements were entered into between the Trustees entrusted by the Company and Chuangxin Investment or Yonyou Up, and the transactions contemplated thereunder were conducted or completed (as applicable) within a 12-month period, the transactions contemplated under the Equity Transfer Agreements shall be aggregated pursuant to Rule 14A.81 of the Hong Kong Listing Rules. After aggregation, as one or more applicable percentage ratios calculated in accordance with the Hong Kong Listing Rules exceed 0.1% but are less than 5%, the transactions contemplated under the Equity Transfer Agreements constitute connected transactions of the Company which are subject to the reporting and announcement requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

Reference is made to the announcements of the Company dated 13 April 2015 and 8 June 2015, the circular of the Company dated 23 April 2015 in relation to, among other things, the adoption of the Employee Trust Benefit Scheme, and the announcements of the Company dated 6 December 2018 and 5 June 2019 in relation to, among other things, the sale of Domestic Shares for the implementation of the Employee Trust Benefit Scheme.

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BACKGROUND

In order to implement the Scheme, the Company has entrusted National Trust to set up the trust for the benefit of the participants of the Scheme who are connected persons of the Company, and has entrusted Hwabao Trust to set up the trust for the benefit of the participants of the Scheme who are not connected persons of the Company.

On 6 December 2018, National Trust, entrusted by the Company, entered into the Equity Transfer Agreement VI with Chuangxin Investment, pursuant to which National Trust agreed to sell 250,000 Domestic Shares held by National Trust to Chuangxin Investment. The aggregate consideration of the transactions contemplated under the Equity Transfer Agreement VI is RMB2,170,000.

On 6 December 2018, Hwabao Trust, entrusted by the Company, entered into the Equity Transfer Agreement VII with Chuangxin Investment, pursuant to which Hwabao Trust agreed to sell 1,030,000 Domestic Shares held by Hwabao Trust to Chuangxin Investment. The aggregate consideration of the transactions contemplated under the Equity Transfer Agreement VII is RMB8,940,400.

On 5 June 2019, National Trust, entrusted by the Company, entered into the Equity Transfer Agreement VIII with Chuangxin Investment, pursuant to which National Trust agreed to sell 375,000 Domestic Shares held by National Trust to Chuangxin Investment. The aggregate consideration of the transactions contemplated under the Equity Transfer Agreement VIII is RMB3,180,000.

On 6 December 2019, Hwabao Trust, entrusted by the Company, entered into the Equity Transfer Agreement IX with Yonyou Up, pursuant to which Hwabao Trust agreed to sell 450,000 Domestic Shares held by Hwabao Trust to Yonyou Up. The aggregate consideration of the transactions contemplated under the Equity Transfer Agreement IX is RMB3,393,000.

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THE EQUITY TRANSFER AGREEMENT IX

A summary of the principal terms of the Equity Transfer Agreement IX is set out below:

Date:	6 December 2019
Parties:	(i) Hwabao Trust, as the transferor
	(ii) Yonyou Up, as the transferee
Effective Date:	The Equity Transfer Agreement IX shall take effect from
	the date of execution by the legal representatives (managing
	partners) or authorized representatives and being stamped
	with the official seals of both parties.
Target Assets:	450,000 Domestic Shares held by Hwabao Trust, representing
	approximately 0.21% of the total share capital of the
	Company.
Consideration:	The aggregate consideration under the Equity Transfer
	Agreement IX is RMB3,393,000 which was determined
	according to the average closing price of the H Shares of
	ninety (90) trading days preceding the execution date of
	the Equity Transfer Agreement IX (the exchange rate is
	the central parity rate of RMB to HKD announced by the
	People's Bank of China on the business day preceding the
	execution of the Equity Transfer Agreement IX) as set out
	in the relevant terms of the Scheme, being RMB7.54 per
	share, as well as the number of the abovementioned 450,000
	Domestic Shares to be transferred.

Payment Arrangements: The aggregate consideration under the Equity Transfer Agreement IX shall be settled in a lump sum payment before 20 December 2019.

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Closing andUpon the settlement of the aggregate consideration by the Transitional Period: transferee to the transferor, the transferee will be entitled to enjoy the relevant shareholder's rights and undertake the relevant shareholder's obligations in accordance with the relevant laws and regulations, the articles of association of the Company and the Equity Transfer Agreement IX as the

owner of the Target Assets.

During the transitional period from the execution date of the Equity Transfer Agreement IX to the date when the Target Assets are being registered under the name of the transferee, the profit and loss of the Company shall belong to the transferee.

FINANCIAL INFORMATION OF THE GROUP

The unaudited total assets and net assets of the Group as of 30 September 2019 were approximately RMB1,533.01 million and RMB1,300.80 million, respectively. The audited profit (both before and after taxation) attributable to the Group for the two years ended 31 December 2017 and 2018 is set out below:

	For the	For the
	year ended	year ended
	31 December	31 December
	2017	2018
	(RMB'000)	(RMB'000)
Profit before taxation attributable to the Group	242,777	110,208
Profit after taxation attributable to the Group	222,837	106,812

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EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

The table below sets out the shareholding structure of the Company regarding the Domestic Shares before and after the completion of the Equity Transfer under the Equity Transfer Agreement IX:

	Immediately before the completion	Immediately after the completion
	of the Equity Transfer under	of the Equity Transfer under
	the Equity Transfer Agreement IX	the Equity Transfer Agreement IX
				Approximate							Approximate
				percentage of		Approximate				percentage of		Approximate
				shareholdings		percentage of				shareholdings		percentage of
	Number of		in the total		shareholdings	Number of		in the total		shareholdings
Name of Domestic	Domestic		share capital	in the Domestic	Domestic		share capital	in the Domestic
Shareholders	Shares held	of the Company		Shares	Shares held	of the Company		Shares
							(Note 1)						(Note 1)
The Parent	149,732,474		68.94%	92.32%	149,732,474	68.94%	92.32%
Yonyou Up(Note 2)	6,002,952	2.76%	3.70%	6,452,952	2.97%	3.98%
National Trust	2,795,000	1.29%	1.72%	2,795,000	1.29%	1.72%
Hwabao Trust	2,447,400	1.13%	1.51%	1,997,400	0.92%	1.23%
Happiness Investment	670,784	0.31%	0.41%	670,784	0.31%	0.41%
Tongyun Jitian
Investment	496,133	0.23%	0.31%	496,133	0.23%	0.31%
Huicai Juneng
Investment	36,923	0.02%	0.02%	36,923	0.02%	0.02%
Total	162,181,666		74.68%	100.00%	162,181,666	74.68%	100.00%

Notes:

1. The percentage of shareholding is rounded to the nearest two decimal places and the total percentage of shareholding may not add up to 100% due to rounding.
2. On 11 November 2019, Yonyou Up entered into an equity transfer agreement with Chuangxin Investment, pursuant to which Chuangxin Investment agreed to sell 6,002,952 Domestic Shares held by Chuangxin Investment to Yonyou Up for an aggregate consideration of RMB38,088,700.

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REASONS FOR AND BENEFITS OF ENTERING INTO THE EQUITY TRANSFER AGREEMENTS

The Equity Transfer Agreements were entered into so as to facilitate the implementation of the Scheme. According to the Scheme, the Trustees shall purchase from, or sell to, Domestic Shareholders or the secondary market, the Target Shares. The Equity Transfer Agreements were entered into as certain Scheme Participants applied to exercise their Trust Beneficial Rights.

The Directors (including the independent non-executive Directors) are of the view that each of the Equity Transfer Agreement VI, the Equity Transfer Agreement VII, the Equity Transfer Agreement VIII and the Equity Transfer Agreement IX was conducted on normal commercial terms, and although the transactions contemplated thereunder are not in the ordinary and usual course of business of the Company, the terms and conditions therein are fair and reasonable and in line with the overall development strategy of the Group as well as in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE HONG KONG LISTING RULES

Each of Hwabao Trust and National Trust has been entrusted by the Company to set up trusts for the implementation of the Scheme. Each of Chuangxin Investment and Yonyou Up is a subsidiary of the Parent, the controlling shareholder of the Company, and therefore a connected person of the Company.

As the Equity Transfer Agreements were entered into between the Trustees entrusted by the Company and Chuangxin Investment or Yonyou Up, and the transactions contemplated thereunder were conducted or completed (as applicable) within a 12-month period, the transactions contemplated under the Equity Transfer Agreements shall be aggregated pursuant to Rule 14A.81 of the Hong Kong Listing Rules. After aggregation, as one or more applicable percentage ratios calculated in accordance with the Hong Kong Listing Rules exceed 0.1% but are less than 5%, the transactions contemplated under the Equity Transfer Agreements constitute connected transactions of the Company which are subject to the reporting and announcement requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

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Our Directors, Mr. Wang Wenjing and Mr. Wu Zhengping are also directors of the Parent or its subsidiaries, and have therefore abstained from voting on the relevant Board resolutions approving the Equity Transfer Agreements and the transactions contemplated thereunder. Save as disclosed above, none of the other Directors has any material interest in the Equity Transfer Agreements and the transactions contemplated thereunder and therefore no other Director has abstained from voting on such Board resolutions.

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, save as disclosed above, there is no other connected transaction entered into between any member of the Group and the Parent Group and its ultimate beneficial owner(s) within a 12-month period or are otherwise related, which would, together with the transactions contemplated under the Equity Transfer Agreements, be aggregated pursuant to Rule 14A.81 of the Hong Kong Listing Rules.

INFORMATION ON THE PARTIES INVOLVED

The Company

The Company is a leading provider of enterprise software and services designed for micro and small scale enterprises in the PRC. The core business of the Company is to develop and provide software and services designed to satisfy the informatization needs of micro and small scale enterprises.

Yonyou Up

Yonyou Up is principally engaged in businesses including the technical development, consultation and services of computer software, hardware and ancillary equipment.

Chuangxin Investment

Chuangxin Investment is principally engaged in investment management.

Hwabao Trust and National Trust

Each of Hwabao Trust and National Trust is principally engaged in, among other things, fund trust, moveable property trust, real estate trust, negotiable securities trust, and other property or property right trust.

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DEFINITIONS

Unless the context otherwise requires, capitalized terms used in this announcement shall have the meanings as follow:

"Board"	the board of directors of the Company
"Chuangxin	Beijing Chuangxin Investment Centre (Limited Partnership)
Investment"	( 北 京 用 友 創 新 投 資 中 心（ 有 限 合 夥)), a limited
	partnership established in the PRC on 23 June 2010, the
	equity of which is owned by the Parent and Happiness
	Investment as to 99% and 1%, respectively
"Company"	Chanjet Information Technology Company Limited ( 暢 捷 通
	信 息 技 術 股 份 有 限 公 司), a joint stock limited company
	incorporated in the PRC with limited liability, the H Shares
	of which are listed and traded on the Hong Kong Stock
	Exchange
"connected person(s)"	has the meaning ascribed to it under the Hong Kong Listing
	Rules
"controlling	has the meaning ascribed to it under the Hong Kong Listing
shareholder"	Rules
"Director(s)"	the director(s) of the Company
"Domestic Share(s)"	the ordinary share(s) in the share capital of the Company
	with a nominal value of RMB1.00 each, which are subscribed
	for and paid up in RMB and are unlisted shares which are not
	currently listed or traded on any stock exchange
"Domestic	the holder(s) of the Domestic Shares
Shareholder(s)"
"Employee Trust	the employee trust benefit scheme of the Company
Benefit Scheme"
or "Scheme"
"Equity Transfer"	the transfer of Domestic Shares contemplated under the
	Equity Transfer Agreements
"Equity Transfer	collectively, the Equity Transfer Agreement VI, the Equity
Agreements"	Transfer Agreement VII, the Equity Transfer Agreement VIII
	and the Equity Transfer Agreement IX

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"Equity Transfer	the equity transfer agreement dated 6 December 2018 entered
Agreement VI"	into between National Trust and Chuangxin Investment in
	respect of the transfer of 250,000 Domestic Shares
"Equity Transfer	the equity transfer agreement dated 6 December 2018 entered
Agreement VII"	into between Hwabao Trust and Chuangxin Investment in
	respect of the transfer of 1,030,000 Domestic Shares
"Equity Transfer	the equity transfer agreement dated 5 June 2019 entered into
Agreement VIII"	between National Trust and Chuangxin Investment in respect
	of the transfer of 375,000 Domestic Shares
"Equity Transfer	the equity transfer agreement dated 6 December 2019 entered
Agreement IX"	into between Hwabao Trust and Yonyou Up in respect of the
	transfer of 450,000 Domestic Shares
"Group"	the Company and its subsidiaries
"Happiness	Happiness Investment Co., Ltd. ( 北 京 用 友 幸 福 投 資 管 理
Investment"	有 限 公 司), a company established in the PRC with limited
	liability on 12 May 2010 and one of the promoters of the
	Company and a holding subsidiary of the Parent, in which the
	Parent holds 60% of the shares
"H Share(s)"	overseas listed foreign invested ordinary share(s) in the share
	capital of the Company with a nominal value of RMB1.00
	each, which is/are listed and traded on the Hong Kong Stock
	Exchange
"HKD"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the
	People's Republic of China
"Hong Kong Listing	the Rules Governing the Listing of Securities on The Stock
Rules"	Exchange of Hong Kong Limited
"Hong Kong Stock	The Stock Exchange of Hong Kong Limited
Exchange"

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"Huicai Juneng	Beijing Huicai Juneng Investment Management Centre
Investment"	(Limited Partnership) ( 北 京 匯 才 聚 能 投 資 管 理 中 心（有
	限 合 夥)), a limited partnership established in the PRC on 30
	August 2011, with Mr. Cai Jingsheng as its general partner,
	and certain employees and ex-employees of the Company as
	its limited partners
"Hwabao Trust"	Hwabao Trust Co., Ltd. ( 華 寶 信 託 有 限 責 任 公 司), a
	company established in the PRC with limited liability on 10
	September 1998
"National Trust"	National Trust Co., Ltd. ( 國 民 信 託 有 限 公 司), a company
	established in the PRC with limited liability on 12 January
	1987
"Parent"	Yonyou Network Technology Co., Ltd. ( 用 友 網 絡 科 技 股
	份 有 限 公 司), a joint stock limited company incorporated
	in the PRC on 18 January 1995, the shares of which are
	listed on the Shanghai Stock Exchange ( 上 海 證 券 交 易 所)
	(Stock Code: 600588), and the controlling shareholder of the
	Company
"Parent Group"	the Parent and its subsidiaries
"PRC"	the People's Republic of China which, for the purpose
	of this announcement, excludes the Hong Kong Special
	Administrative Region of the People's Republic of China,
	the Macau Special Administrative Region of the People's
	Republic of China and the region of Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Scheme	Employee(s) of the Company and its subsidiaries who can
Participant(s)"	participate in the Scheme and be granted the Trust Benefit
	Units as decided by the Board
"Share(s)"	the Domestic Share(s) and the H Share(s)
"Shareholder(s)"	the holder(s) of the Shares
"Target Assets"	450,000 Domestic Shares held by Hwabao Trust, representing
	approximately 0.21% of the total share capital of the
	Company

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"Target Share(s)"	the Share(s) involved in the Scheme
"Tongyun Jitian	Beijing Tongyun Jitian Investment Management Centre
Investment"	(Limited Partnership) ( 北 京 通 雲 濟 天 投 資 管 理 中 心（有
	限 合 夥)), a limited partnership established in the PRC on 30
	August 2011, with Mr. Jiao Jianyu as its general partner, and
	certain employees and ex-employees of the Company as its
	limited partners
"trading day(s)"	the day(s) on which securities can be traded on the Hong
	Kong Stock Exchange
"Trust Beneficial	the rights which the Scheme Participants are entitled to in
Rights"	respect of the Trust Benefit Units
"Trust Benefit Unit(s)"	unit(s) of beneficial rights as divided by the Trustees and
	granted to the Scheme Participants by the Board
"Trustee(s)"	the trustee(s) engaged by the Company for the administration
	of the Scheme, which will hold the Target Shares for the
	benefit of the participants of the Scheme subject to the terms
	and conditions of the respective trust deeds between the
	Company and the trustee(s) for the purpose of the Scheme
"Yonyou Up"	Yonyou Up Information Technology Co., Ltd. ( 用 友 優 普 信
	息 技 術 有 限 公 司), a company established in the PRC with
	limited liability on 25 February 2014, and a wholly-owned
	subsidiary of the Parent

On behalf of the Board

Chanjet Information Technology Company Limited

Wang Wenjing

Chairman

Beijing, the PRC

6 December 2019

As at the date of this announcement, the non-executive Directors are Mr. Wang Wenjing and Mr. Wu Zhengping; the executive Director is Mr. Yang Yuchun; and the independent non-executive Directors are Mr. Chen, Kevin Chien-wen, Mr. Lau, Chun Fai Douglas and Mr. Chen Shuning.

• For identification purposes only

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