CIFI : CONNECTED TRANSACTION - DISPOSAL OF ENTIRE EQUITY INTEREST IN SHANGHAI XUBEI ENTERPRISE CO., LTD.

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CIFI Holdings (Group) Co. Ltd.

旭 輝 控 股（ 集 團 ）有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00884) CONNECTED TRANSACTION DISPOSAL OF ENTIRE EQUITY INTEREST IN SHANGHAI XUBEI ENTERPRISE CO., LTD.

Reference is made to the announcement of the Company dated 13 December 2016 (the "Announcement") in relation to the non-return of the Security Deposit paid by Xubei for the tender of the Land.

On 26 January 2017, Youdao (an indirect wholly-owned subsidiary of the Company) and Changrui (a company beneficially owned by Mr. LIN Wei and Mr. LIN Feng, the executive Directors of the Company) entered into the Sale and Purchase Agreement, pursuant to which Youdao agreed to sell and Changrui agreed to purchase the Target Shares, representing the entire issued share capital of Xubei.

Pursuant to the Sale and Purchase Agreement, (i) the consideration for the Target Shares is RMB1,000,000, which is to be satisfied in cash by Changrui to Youdao within 10 business days from the date of the Sale and Purchase Agreement; and (ii) Xubei shall also repay the Shareholder's Loan to Youdao within 10 business days from the date of the Sale and Purchase Agreement. Changrui has agreed to guarantee Xubei's payment obligations for the Shareholder's Loan.

As disclosed in the Announcement, the Group has been evaluating measures to recover the Security Deposit. At present, the Company believes that the recovery of the Security Deposit requires further dealings with relevant government authorities which could involve time and uncertainty. The Transaction enables the Group to eliminate uncertainty in recovery of the Security Deposit.

As at the date of the Sale and Purchase Agreement, Mr. LIN Wei and Mr. LIN Feng are the beneficial owners of Changrui. As such, Changrui is a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the Transaction constitutes a connected transaction of the Company under the Listing Rules.

Since certain applicable percentage ratios for the sale of the Target Shares calculated on aggregated basis are above 0.1% but less than 5%, the Transaction is only subject to reporting and announcement requirements and exempt from the circular and independent shareholders' approval requirements under Rule 14A.76(2) of the Listing Rules.

Major terms of the Sale and Purchase Agreement and some other information relating to the Transaction are set out below:

THE SALE AND PURCHASE AGREEMENT Date

26 January 2017

Parties Vendor: Youdao, an indirect wholly-owned subsidiary of the Company; and Purchaser: Changrui, a company jointly beneficially owned by Mr. LIN Wei, an executive Director and vice chairman of the Company and Mr. LIN Feng, an executive Director and chief executive officer of the Company Subject matter

Youdao agreed to sell to Changrui the Target Shares.

Consideration

The consideration for the Target Shares is RMB1,000,000, which is to be satisfied in cash by Changrui to Youdao within 10 business days from the date of the Sale and Purchase Agreement. Pursuant to the Sale and Purchase Agreement, Xubei shall also repay the Shareholder's Loan to Youdao within 10 business days from the date of the Sale and Purchase Agreement. Changrui has agreed to guarantee Xubei's payment obligations for the Shareholder's Loan.

INFORMATION ABOUT XUBEI

No profit or loss was recorded for the year ended 31 December 2015, since Xubei was only established on 28 December 2015 with a registered capital of RMB1,000,000. It is principally engaged in property development and investment in the PRC.

Based on the unaudited financial statements of Xubei for the year ended 31 December 2016, which were prepared in accordance with the accounting principle generally accepted in the PRC, Xubei recorded: (i) a net loss before taxation of approximately RMB106,000 for the year ended 31 December 2016; (ii) a net loss after taxation of approximately RMB106,000 for the year ended 31 December 2016 and (iii) total assets of approximately RMB374,061,000 and net assets of approximately RMB106,000 as at 31 December 2016.

Out of the total assets of Xubei as at 31 December 2016, the Security Deposit accounted for RMB373,950,000. Out of the total liabilities of Xubei as at 31 December 2016, the Shareholder's Loan accounted for RMB373,955,000.

INFORMATION ABOUT THE GROUP AND CHANGRUI

The Group is principally engaged in the property development and property investment businesses in the PRC.

Changrui is principally engaged in enterprise investments in the PRC and is jointly beneficially owned by Mr. LIN Wei and Mr. LIN Feng.

RATIONALE, BASIS OF CONSIDERATION AND FINANCIAL IMPACT OF THE TRANSACTION

As disclosed in the Announcement, the Group has been evaluating measures to recover the Security Deposit. At present, the Company believes that the recovery of the Security Deposit requires further dealings with relevant government authorities and could involve time and uncertainty. The Transaction enables the Group to eliminate uncertainty in recovery of the Security Deposit.

The consideration for sale of the Target Shares and the repayment of the Shareholder's Loan was determined by the parties on an arm's length basis after taking into consideration respectively, among others, (i) the registered capital of Xubei; and (ii) the amount of the Shareholder's Loan, and are on normal or better commercial terms to the Company with reference to similar transactions.

Upon completion of the Transaction, Xubei will cease to be a subsidiary of the Group. It is expected that upon completion of the Transaction, the Group will be able to recover RMB374,955,000 in cash which is equivalent to the Group's original contribution to Xubei. The Group is expected not to incur material loss or profit from the Transaction. The net cash proceeds to be generated from the completion of the Transaction are intended to be used as general working capital of the Group. Apart from the above, it is not expected to have material impact on the financial position of the Group.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of the Sale and Purchase Agreement, Mr. LIN Wei and Mr. LIN Feng are the beneficial owners of Changrui. As such, Changrui is a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the Transaction constitutes a connected transaction of the Company under the Listing Rules.

Since certain applicable percentage ratios for the sale of the Target Shares calculated on aggregated basis are above 0.1% but less than 5%, the Transaction is only subject to reporting and announcement requirements and is exempt from the circular and the independent shareholders' approval requirements under Rule 14A.76(2) of the Listing Rules.

Mr. LIN Wei and Mr. LIN Feng, being executive Directors, are the beneficial owners of the entire equity of Changrui and are considered to have a material interest in the sale of the Target Shares and therefore they, together with another executive Director, Mr. LIN Zhong, who is brother of Mr. LIN Wei and Mr. LIN Feng has abstained from voting on the Board resolutions of the Company for the approval of the sale of the Target Shares. Save as disclosed above, none of the Directors have any material interest in the sale of the Target Shares nor is any of them required to abstain from voting in respect of the relevant Board resolutions.

All the independent non-executive Directors and the executive Directors (in respect of executive Directors, they have expressed their views although they have abstained from voting) are of the opinion that the Transaction is on normal or better commercial terms to the Company, and the terms of the Sale and Purchase Agreement (including the consideration of the sale of the Target Shares) are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

DEFINITIONS

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

"Board" the board of Directors

"Changrui" Ningbo Changrui Investments Co., Ltd.* (寧波昌瑞投資 有限公司), a company established in the PRC with limited liability and jointly beneficially owned by Mr. LIN Wei and Mr. LIN Feng

"Company" CIFI Holdings (Group) Co. Ltd. (旭輝控 股（集 團）有限公 司), a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange

"connected person" has the same meaning ascribed to it under the Listing Rules "Directors" the directors of the Company

"Group" the Company and its subsidiaries

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

"Land" land plots situated at 39-04, 40-02, 41-02, 43-01 and the underground space of 40-01 and the spaces connecting those land plots at south of Chumin East Road, West Hongqiao,

Qingpu District, Shanghai

"Listing Rules" the Rules Governing the Listing of Securities on the Stock

Exchange