Dah Chong Hong : Disposal of Property

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

(Incorporated in Hong Kong with limited liability)

(Stock Code: 01828) DISCLOSEABLE TRANSACTION DISPOSAL OF PROPERTY

The Board is pleased to announce that on 27 January 2017, the Vendor, an indirect wholly- owned subsidiary of the Company, entered into the Agreement with the Purchaser pursuant to which the Vendor has agreed to sell and the Purchaser has agreed to acquire the Property at the Consideration of JPY5,500.0 million (equivalent to approximately HK$375.7 million).

As the highest applicable percentage ratios as defined under Rule 14.07 of the Listing Rules in respect of the Disposal exceeds 5% but is less than 25%, the Disposal under the Agreement constitutes a discloseable transaction of the Company and is subject to notification and announcement requirements under Chapter 14 of the Listing Rules.

BACKGROUND

The Board is pleased to announce that on 27 January 2017, the Vendor, an indirect wholly- owned subsidiary of the Company, entered into the Agreement with the Purchaser pursuant to which the Vendor has agreed to sell and the Purchaser has agreed to acquire the Property at the Consideration of JPY5,500.0 million (equivalent to approximately HK$375.7 million).

THE AGREEMENT Date

27 January 2017

Parties

1. the Vendor, an indirect wholly-owned subsidiary of the Company;

2. the Purchaser, which is principally engaged in property rental and management. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are Independent Third Parties.

Subject matter The Property Consideration

The Consideration, being a total of JPY5,500.0 million (equivalent to approximately HK$375.7 million) (exclusive of consumption tax of JPY9.1 million (equivalent to approximately HK$0.6 million)), comprised (a) the price of the land of the Property of JPY5,386.2 million (equivalent to approximately HK$367.9 million) and (b) the price of the building of the Property of JPY113.8 million (equivalent to approximately HK$7.8 million). The full sum of Consideration should be payable by the Purchaser in cash upon execution of the Agreement.

The Consideration for the Disposal was arrived at arm's length negotiations between the Purchaser and the Vendor after taking into consideration of the property evaluation proposals on the market price of the Property from a number of property agents in Japan.

The Vendor should deliver the Property to the Purchaser upon receipt of the full sum of Consideration.

INFORMATION ABOUT THE GROUP

The Group is an integrated trading and distribution company operating in Asia with a focus on Greater China, supported by an extensive logistics network. The Group is a leading distributor and dealer of motor vehicles in Greater China, and it also provides a full range of motor-related services. The Company's consumer business distributes food, personal care, lifestyle and healthcare products. Established in 1949 and listed on the Stock Exchange, the Company has business operations in Hong Kong, mainland China, Taiwan, Macao, Singapore, Japan, Myanmar, Thailand, Malaysia, Indonesia, Brunei and the Philippines.

The Vendor is principally engaged in property management, rental and investment and is an indirect wholly-owned subsidiary of the Company.

INFORMATION ABOUT THE PROPERTY

The Property is situated at Lot numbers: 209-2, 209-3, 209-4 and 209-9 of Roppongi 3- chome, Minato-ku, Tokyo, Japan. The Property has a publicly registered land area of

472.29 sq. m., a 9 storey building with 1 level basement for commercial use with floor area of approximately 3,207.78 sq. m. and the parking lot with floor area of approximately

35.96 sq. m. for commercial use.

An estimated valuation gain of approximately JPY1,750.9 million (equivalent to approximately HK$119.6 million)(unaudited), representing the difference between the Consideration (net of relevant expenses and tax) and the carrying amount of the Property as disclosed in the last interim report of the Company for the six months ended 30 June 2016 in the amount of JPY2,672.0 million (equivalent to approximately HK$182.5 million) has been accrued to the Group in its annual result for the year ended 31 December 2016. The net proceeds is intended to be used for general working capital of the Group and/or future development of the Group.

The net profit before and after taxation attributable to the Property (inclusive of valuation gain and rental income generated from the Property) for the year ended 31 December 2014 and 2015:

For the year ended 31 December

2014 JPY' million	2015 JPY' million
Profit before taxation	138.9	289.0
Profit after taxation	85.3	215.0

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Property is one of the non-core assets of the Group. The Property was built 45 years ago and its maintenance cost to the Group is significant. The Disposal can enable the Group to save up the maintenance cost together with the substantial amount of cost required to upgrade the anti-earthquake system of the Property. Through the Disposal, the Group can also unlock the value of its investment in Japan and focus and devote its financial and management resources and strengthen its presence in Hong Kong, PRC and other potential markets, which is in line with the Group's long-term goal to focus on developing its core business and to capture the vast growth opportunities in other business units.

The Property will be handed over to the Purchaser on 'as-is' basis with existing leases carried forward to the Purchaser. The terms of the Agreement have been determined after arm's length negotiations between the parties thereto.

In view of the above, the Directors consider that the terms of the Agreement to be fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATION

As the highest applicable percentage ratios as defined under Rule 14.07 of the Listing Rules in respect of the Disposal exceeds 5% but is less than 25%, the Disposal under the Agreement constitutes a discloseable transaction of the Company and is subject to notification and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

Unless the context otherwise requires, the following expressions have the meanings set out in this announcement:

"Agreement"	the real estate sales and purchase agreement dated 27 January 2017 entered into between the Vendor and the Purchaser in respect of the Disposal
"Board"	the board of Directors
"Company"	Dah Chong Hong Holdings Limited, a company incorporated in Hong Kong with limited liability and whose shares are listed on the Main Board of the Stock Exchange (stock code: 01828)
"Completion"	the completion of the Disposal
"Consideration"	JPY5,500.0 million (equivalent to approximately HK$375.7 million), being the total consideration payable by the Purchaser to the Vendor in respect of the Disposal
"Director(s)"	the director(s) of the Company
"Disposal"	the disposal of the Property by the Vendor to the Purchaser pursuant to the terms and conditions of the Agreement
"Group"	the Company and its subsidiaries from time to time
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Independent Third Party(ies)"	party(ies) who are third parties independent of the Company and its connected persons (as defined in the Listing Rules)
"JPY"	Japanese Yen, the lawful currency of Japan
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange
"PRC"	the People's Republic of China, which for the purpose of this announcement excludes Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan