China Shenghai : INSIDE INFORMATION MEMORANDUM OF UNDERSTANDING IN RELATION TO THE POSSIBLE ACQUISITION

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.

中國升海集團有限公司

China Shenghai Group Limited

(formerly known as China Shenghai Food Holdings Company Limited)

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1676)

INSIDE INFORMATION MEMORANDUM OF UNDERSTANDING

IN RELATION TO THE POSSIBLE ACQUISITION

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

The Board is pleased to announce that on 24 March 2021 (after trading hours), the Group entered into a Memorandum of Understanding in relation to the Possible Acquisition.

The Board wishes to emphasize that the Memorandum of Understanding is not legally binding. As at the date of this announcement, no legally binding agreement in relation to the Possible Acquisition has been entered into.

If the Possible Acquisition materialises, the transaction may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. Further announcement(s) in respect of the Possible Acquisition will be made by the Company in accordance with applicable requirements of the Listing Rules as and when appropriate.

As the Memorandum of Understanding is not legally binding, the Group may or may not proceed the Possible Acquisition with the respective possible seller under the Memorandum of Understanding. Further, as no legally binding agreement with respect to the Possible Acquisition has been entered into, the Possible Acquisition may or may not proceed. Shareholders and possible investors of the Company are reminded to exercise caution when dealing in the Shares.

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

MEMORANDUM OF UNDERSTANDING

The Board is pleased to announce that on 24 March 2021 (after trading hours), the Group entered into a Memorandum of Understanding in relation to the Possible Acquisition.

The major terms and conditions of the Memorandum of Understanding are set forth as follows:

Date:

24 March 2021

Parties:

• (i) the Company, as the possible purchaser; and

• (ii) 合盈小額貸款（重慶）有限公司 (Heying Small Loan

(Chongqing) Co. Ltd.*), as the possible seller

Subject matter:

The Properties

Consideration:

Not more than RMB70,000,000

Nevertheless, the consideration remains under negotiation and will be disclosed in a further announcement upon entering into a definitive agreement in respect of the Possible Acquisition.

Exclusivity:

The possible seller have undertaken to the Company that, during the period commencing on the date of the Memorandum of Understanding and ending on (and including) the earlier of: (a) the date falling 90 days after the date of the Memorandum of Understanding; and (b) the date on which the Company and the possible seller have agreed to terminate the negotiation of the Possible Acquisition in writing, the Company shall have an exclusive right to negotiate the Possible Acquisition with the possible seller.

Non-legally Binding:

Save for the provisions of the Memorandum of Understanding in relation to exclusivity, confidential information, joint and several liability of the possible seller, governing law and dispute resolution, the Memorandum of Understanding is not legally binding.

Further information regarding the Properties, the terms and conditions of the Possible Acquisition will be set out in a further announcement upon entering into a definitive agreement regarding the Possible Acquisition.

REASONS FOR THE POSSIBLE ACQUISITION

The Group is principally engaged in the packaging and sales of dried seafood and sales of fast moving consumer products in Hong Kong and Asia Pacific. The Group has been exploring investment opportunities from time to time with an aim to enhance the interests of the Company and the Shareholders as a whole.

The Group intends to hold the Properties for investment purpose and will lease out the Properties after completion of the Possible Acquisition for rental income. Therefore, the Possible Acquisition offers the Group an appealing property investment opportunity for capital appreciation and stable rental income in the future.

GENERAL

The Board wishes to emphasize that the Memorandum of Understanding is not legally binding and not exclusive. As at the date of this announcement, no legally binding agreement in relation to the Possible Acquisition has been entered into.

The final terms of the definitive agreement in respect of the Possible Acquisition are subject to further negotiations between the parties and have yet to be finalised and may therefore deviate from those set out in the Memorandum of Understanding.

If the Possible Acquisition materialises, the transaction may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. Further announcement(s) in respect of the Possible Acquisition will be made by the Company in accordance with applicable requirements of the Listing Rules as and when appropriate.

As the Memorandum of Understanding is not legally binding, the Group may or may not proceed the Possible Acquisition with the respective possible seller under the Memorandum of Understanding. Further, as no legally binding agreement with respect to the Possible Acquisition has been entered into, the Possible Acquisition may or may not proceed. Shareholders and possible investors of the Company are reminded to exercise caution when dealing in the Shares.

DEFINITIONS

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

"associate(s)"	has the meaning ascribed thereto in the Listing Rules
"Board"	the board of Directors
"Company"	China Shenghai Group Limited (中國升海集團有限公司), a
company incorporated in the Cayman Islands with limited
liability, the securities of which are listed on the Main Board of
the Stock Exchange
"Director(s)"	the director(s) of the Company

"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the People's
Republic of China
"Independent Third	third party who is independent of the Company and its
Party(ies)"	connected persons (as defined in the Listing Rules)
"Memorandum of	the memorandum of understanding entered into by the Group
Understanding"	on 24 March 2021 in relation to the Possible Acquisition
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
Exchange
"Properties"	重慶市渝北區黃山大道東段 181-2 號、181-6 號、181-8 號、
197-4 號、197-3 號 (No. 181-2, No. 181-6, No. 181-8, No.
197-4, No. 197-3, East Section of Huangshan Avenue, Yubei
District, Chongqing*), 重慶市渝北區金開大道 1006 號同
舟• 世紀苑 8 號商鋪 (Shop 8, Tongzhou • Century Court, No.
1006, Jinkai Avenue, Yubei District, Chongqing*) and 重慶市
北碚區蔡家崗鎮嘉和路 1 號 12 幢 1-1 (1-1, Building 12, No.
1, Jiahe Road, Caijiagang Town, Beibei District, Chongqing*)
"Possible Acquisition"	the possible acquisition of the Properties by the Group
"RMB"	Renminbi, the lawful currency of the People's Republic of
China, which for the purpose of this announcement excludes
Hong Kong, the Macau Special Administrative Region of the
PRC and Taiwan
"Share(s)"	ordinary share(s) in the share capital of the Company
"Shareholder(s)"	holder(s) of the Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"subsidiary(ies)"	has the meaning ascribed to it under the Listing Rules
By the Order of the Board
China Shenghai Group Limited
Liu Rongru
Joint-Chairman and Chief Executive Officer

Xiamen, the PRC, 24 March 2021

As at the date of this announcement, the non-executive director of the Company is Mr. Li Dongfan; the executive directors of the Company are Mr. Liu Rongru and Ms. Li Jiayin and the independent non-executive directors of the Company are Mr. Liu Dajin, Mr. Liu Juntingand Mr. Pang Wai Ching.

* For identification purposes only