Target Insurance : PROFIT WARNING AND PROVISION OF LOAN BY CONNECTED PERSONS

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.

TARGET INSURANCE (HOLDINGS) LIMITED

泰 加 保 險 （ 控 股 ） 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock code : 06161)

PROFIT WARNING

AND

PROVISION OF LOAN BY CONNECTED PERSONS

PROFIT WARNING

The Board wishes to inform the Shareholders and potential investors of the Company that, based on the unaudited management accounts of the Group for the year ended 31 December 2019, it is anticipated that the Group will record a significant increase in loss before tax by approximately 54% to approximately HK$193.2 million for the year ended 31 December 2019 as compared with loss before tax of HK$125.8 million for the last corresponding year.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

PROVISION OF LOAN BY CONNECTED PERSONS

The Board announces that on 13 March 2020, the Company as borrower, entered into the Loan Agreements with each of Dr. Cheung, Mr. Chiu and Mr. Lai, each as lender, pursuant to which each of the Lenders agreed to provide to the Company the Loans in the principal amount of HK$40,000,000, HK$25,000,000 and HK$25,000,000 respectively at an interest rate of 3.5% per annum for a term commencing from 13 March 2020 to 12 September 2020, subject to and upon the terms and conditions of the respective Loan Agreements.

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As at the date of this announcement:-

1. Dr. Cheung is the Chairman of the Board, an executive Director and a controlling Shareholder who is interested in approximately 30.45% of the total number of issued Shares;
2. Mr. Chiu is an executive Director and a substantial Shareholder who is interested in approximately 13.44% of the total number of issued Shares; and
3. Mr. Lai is an executive Director and a substantial Shareholder who is interested in approximately 13.43% of the total number of issued Shares,

and hence each of them is regarded as a connected person of the Company as defined under Chapter 14A of the Listing Rules. Accordingly, the transaction contemplated under the respective Loan Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. However, as the respective Loan was made for the benefit of the Group on normal commercial terms (or better) and since no security over the assets of the Group is granted in respect of each of the Loans, the provision of the Loans by the Lenders fall under Rule 14A.90 of the Listing Rules and thus are fully exempted from reporting, announcement and independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

PROFIT WARNING

This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the Inside Information Provisions under Part XIVA of the SFO.

The Board hereby inform the Shareholders and potential investors of the Company that, based on the unaudited management accounts of the Group for the year ended 31 December 2019 (the "Management Accounts"), it is anticipated that the Group will record a significant increase in loss before tax by approximately 54% to approximately HK$193.2 million for the year ended 31 December 2019 as compared with loss before tax of HK$125.8 million for the last corresponding year. The loss was due to the substantial increase in net insurance claims and loss adjustment expenses of approximately HK$116.7 million. The net insurance claims and loss adjustment expenses for the year ended 31 December 2019 is approximately HK$512.5 million, in which approximately HK$127.9 million additional provision is made based on independent actuarial preliminary review of motor and employees' compensation/employers' liability business insurance as at 31 December 2019 of which around 77% is caused by the increase of claims frequency and claims severity on third party bodily injury claims of our taxi motor insurance business.

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As the information contained in this announcement is only based on the preliminary review of the Management Accounts, and is not based on any figures or information which has been audited or reviewed by the auditors or the actuaries of the Company and has not been confirmed by the audit committee of the Board. The actual results of the Group may be different from what is disclosed in this announcement, particularly the results of the independent actuarial review of motor and employees' compensation/employers' liability business insurance as at 31 December 2019. It is expected that the annual results of the Group for the year ended 31 December 2019 will be published in March 2020.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

PROVISION OF LOAN BY CONNECTED PERSONS

The Board announces that on 13 March 2020, the Company entered into the Loan Agreements with each of Lenders, pursuant to which each of the Lenders agreed to provide to the Company the loans in the principal amount of HK$40,000,000, HK$25,000,000 and HK$25,000,000 respectively at an interest rate of 3.5% per annum for a term commencing from 13 March 2020 to 12 September 2020, subject to and upon the terms and conditions of the respective Loan Agreements.

THE LOAN AGREEMENTS

Date	:	13 March 2020
Lenders	: Dr. Cheung, Mr. Chiu and Mr. Lai
Borrower	:	the Company

Principal terms of the Loans under the Loan Agreements

The principal terms of the Loan Agreements are the same.

Loan amount	:	Loan 1 - HK$40,000,000
		Loan 2 - HK$25,000,000
		Loan 3 - HK$25,000,000
Interest rate	:	3.5% per annum
Term of the Loan :	6 months from the date of drawdown of the Loan
Purpose	:	The Loans shall be used by the Company for capital injection into Target
		Insurance Company, Limited, a wholly-owned subsidiary of the Company

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Repayment	:	The Loan and interest thereon and remain outstanding shall be repaid on the
		date falling 6 months from the date of drawdown of the respective Loans
Prepayment	:	The Borrower may make any prepayment of part of the Loan at any time
		from the drawdown date
Security for	:	Unsecured
the Loan

The terms of the Loan Agreements were arrived at after arm's length negotiations between the parties and the interest rate in respect of the Loans were on terms better than normal commercial terms offered by independent third party banks and financial institution in Hong Kong.

As at the date of this announcement:-

1. Dr. Cheung is the Chairman of the Board, an executive Director and a controlling Shareholder who is interested in approximately 30.45% of the total number of issued Shares;
2. Mr. Chiu is an executive Director and a substantial Shareholder who is interested in approximately 13.44% of the total number of issued Shares; and
3. Mr. Lai is an executive Director and a substantial Shareholder who is interested in approximately 13.43% of the total number of issued Shares,

and hence each of them is regarded as a connected person of the Company as defined under Chapter 14A of the Listing Rules. Accordingly, the transaction contemplated under the respective Loan Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. However, as the respective Loan was made for the benefit of the Group on normal commercial terms (or better) and since no security over the assets of the Group is granted in respect of each of the Loan, the provision of the Loans by the Lenders fall under Rule 14A.90 of the Listing Rules and thus are fully exempted from reporting, announcement and independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions shall have the following meanings when used herein:

"Board"

the board of Directors

"Company"Target Insurance (Holdings) Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 6161)

"connected person(s)" has the meaning ascribed to it under the Listing Rules

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"Director(s)" "Dr. Cheung" "Group" "Hong Kong"

"HK$"

"Listing Rules"

"Loan 1"

"Loan 2"

"Loan 3"

"Loans"

"Loan Agreement 1"

"Loan Agreement 2"

"Loan Agreement 3"

"Loan Agreements"

"Mr. Chiu" "Mr. Lai" "SFO"

the director(s) of the Company

Dr. Cheung Haywood

the Company and its subsidiaries

Hong Kong Special Administrative Region of the People's Republic of China

Hong Kong dollars, the lawful currency of Hong Kong

the Rules Governing the Listing of Securities on the Stock Exchange

the loan in the principal amount of HK$40,000,000 provided by Dr. Cheung to the Company pursuant to the Loan Agreement 1

the loan in the principal amount of HK$25,000,000 provided by Mr. Chiu to the Company pursuant to the Loan Agreement 2

the loan in the principal amount of HK$25,000,000 provided by Mr. Lai to the Company pursuant to the Loan Agreement 3

collectively, Loan 1, Loan 2 and Loan 3

a loan agreement dated 13 March 2020 entered into between Dr. Cheung and the Company in respect of the provision of Loan 1 by Dr. Cheung

a loan agreement dated 13 March 2020 entered into between Mr. Chiu and the Company in respect of the provision of the Loan 2 by Mr. Chiu

a loan agreement dated 13 March 2020 entered into between Mr. Lai and the Company in respect of the provision of the Loan 3 by Mr. Lai

collectively, Loan Agreement 1, Loan Agreement 2 and Loan Agreement 3

Mr. Chiu Sun Ting

Mr. Lai Bing Leung

the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong)

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"Share(s)"	ordinary share(s) of no par value in the share capital of the
	Company
"Shareholder(s)"	holder(s) of the Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited

By Order of the Board

Target Insurance (Holdings) Limited

Tse Kam Fai

Company Secretary

Hong Kong, 13 March 2020

As at the date of this announcement, the Board comprises six executive Directors, namely Dr. Cheung Haywood (Chairman), Mr. Lai Bing Leung, Mr. Chiu Sun Ting, Mr. Muk Wang Lit Jimmy (Chief Executive Officer), Mr. Chan Hok Ching and Ms. Lau Ka Yee; and three independent non-executive Directors, namely Mr. Wan Kam To, Mr. Wong Shiu Hoi Peter and Mr. Szeto Wai Sun.

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