Trigiant : (011) Letter from Balas Capital Limited

BA LLA S

C A P I T A L

10 May 2017

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING 40% INTEREST IN A NON-WHOLLY-OWNED SUBSIDIARY AND APPLICATION OF WHITEWASH WAIVER

INTRODUCTION

We refer to our engagement as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition and the Whitewash Waiver, details of which are set out in the letter from the Board (the "Letter from the Board") contained in the circular of the Company (the "Circular") to the Shareholders dated 10 May 2017, of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

On 5 April 2017, the Company announced that after the trading hours on 30 March 2017, the Purchaser, a wholly-owned subsidiary of the Company, the Vendor and the Warrantors entered into the SP Agreement, pursuant to which the Purchaser has conditionally agreed to purchase the Sale Shares at a Consideration of RMB377,434,849 (equivalent to approximately HK$425,672,000), which shall be settled partly as to RMB 140,095,440 (equivalent to approximately HK$158,000,000) in cash and settled partly as to RMB237,339,409 (equivalent to approximately HK$267 ,672,000) by the allotment and issue of 228,000,000 Consideration Shares to the Vendor at Completion. The Sale Shares represent 40% of the issued shares of the Target Company and as at the Latest Practicable Date, the Target Company is owned as to 60% by the Purchaser and 40% by the Vendor.

The Acquisition contemplated under the SP Agreement constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the notification and announcement requirements of Chapter 14 of the Listing Rules. In view of the fact that the Vendor is a substantial shareholder of the Company as at the Latest Practicable Date, the Vendor is a connected person of the Company and accordingly, the Acquisition constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. Given that the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Acquisition exceeds 5% but is less than 25% and the Consideration is more than

Ballas Capital Limited

Unit 1802, 18/F, 1 DuddellStreet, Central, Hong Kong Tel: [phone] Fax: [phone]

HK$10,000,000, the Acquisition, including the grant of the Specific Mandate, is subject to the reporting, announcement and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

As at the Latest Practicable Date, (I ) the Mr. Qian Concert Group (comprising Mr. Qian, Abraholme, Trigiant Investments, Mr. Jiang, Neala Holdings, Atrium Noble and Mr. Qian Chenhui), taken together, directly or indirectly, held 622,392,000 Shares, representing approximately 39.81% of the existing issued share capital of the Company; and (2) the Vendor held 200,000,000 Shares, representing approximately 12.79% of the existing issued share capital of the Company.

Upon Completion, a total of 228,000,000 Consideration Shares will be issued to the Vendor and assuming that there is no other change to the issued share capital of the Company from the Latest Practicable Date and up to Completion, (i) the Vendor will in aggregate hold 428,000,000 Shares, representing approximately 23.89% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares; and (ii) the shareholding percentage of the Mr. Qian Concert Group in the Company will be diluted to approximately 34.74%. As a result, as each of (i) the Vendor and (ii) the Mr. Qian Concert Group will be owning more than 20% or more of the voting rights of the Company and is thus associated company (as defined in the Takeovers Code) of the Company and hence, under the definition of "acting in concert" under the Takeovers Code, the Vendor and the Mr. Qian Concert Group would be presumed to be acting in concert with each other.

The allotment and issue of the Consideration Shares to the Vendor would have the effect of increasing the Vendor's shareholding in the Company from 12.79% to 23.89%, and as a result of the Vendor being presumed to be acting in concert with the Mr. Qian Concert Group, the aggregate voting rights of the Vendor together with the Mr. Qian Concert Group and parties acting in concert with each of them in the Company would become 58.63% (assuming that there is no other change to the issued share capital of the Company from the date of this Circular and up to Completion). Such increase of the Vendor's and the Mr. Qian Concert Group's collective holding of voting rights of the Company would therefore trigger an obligation of the Vendor, together with the Mr. Qian Concert Group, and parties acting in concert with each of them, to make a mandatory general offer for all the issued Shares not already owned by them and parties acting in concert with them under Rule 26 of the Takeovers Code, unless the Whitewash Waiver is granted by the Executive and the Whitewash Waiver is approved by the Independent Shareholders. The Vendor has made an application to the Executive for the Whitewash Waiver. The Whitewash Waiver, if granted, would be subject to, among other things, the approval of the Independent Shareholders at the EGM by way of poll.

The Independent Board Committee comprising Dr. Fung Kwan Hung, Professor Jin Xiaofeng, Mr. Poon Yick Pang, Philip, Mr. Ng Wai Hung and Ms. Jia Lina, being all of the non-executive Director and all the independent non-executive Directors, has been established to advise and provide recommendation to the Independent Shareholders on the SP Agreement and the Acquisition and the Whitewash Waiver and to advise the Independent Shareholders on how to vote. None of the Directors had material interests in the transactions contemplated under the Acquisition and accordingly, no Director was required to abstain on the resolutions at the Board meeting held to approve the SP Agreement and the transactions contemplated thereunder. To the best knowledge of the Directors, save for the Mr. Qian Concert Group and the Vendor and parties acting in concert with each of them and their respective associates, who are required to abstain from voting on the resolutions to be proposed at the EGM, no other

Shareholder had a material interest in the SP Agreement, the Acquisition and the Whitewash Waiver and no other Shareholder would be required to abstain from voting at the EGM in respect of the resolutions relating to the SP Agreement, the Acquisition and the Whitewash Waiver.

BASIS OF OUR OPINION

In formulating our opinion, we have relied upon the information, facts and representations contained in the Circular and those supplied or made available to us by the Company, the Directors and the representatives of the Company (including information we obtained from discussions with management of the Company) for which they are solely and wholly responsible, and to their information and knowledge, were true, accurate and complete in all respects at the time they were given or made and continue to be true, accurate and valid as at the Latest Practicable Date and the Company will notify the Shareholders of any material changes to such information, facts and/or representations as soon as possible. We have assumed that all statements and information supplied, and the opinions and representations made or provided to us by the Directors and the representatives of the Company (including information we obtained from discussions with management of the Company) and those contained in the Circular have been reasonably made after due and careful enquiry.

As stated in the Circular, the Directors collectively and individually accept full responsibility for the Circular and having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in the Circular (other than that relating to the Mr. Qian Concert Group, the Vendor and the respective parties acting in concert with them) is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement in the Circular misleading.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have no reason to doubt the truth, accuracy and completeness of the statements, information, opinions and representations provided to us by the Company, the Directors and the representatives of the Company or to believe that material information has been withheld or omitted from the information provided to us or referred to in the available documents. We have not, however, conducted any independent verification of the information provided, nor have we conducted any independent investigation into the business or affairs or future prospects of the Company, the Target Group or any of their respective subsidiaries or associates.

INDEPENDENCE DECLARATION

As at the Latest Practicable Date, we, Ballas Capital Limited, were not aware of any relationships or interests between us and (i) the Company; (ii) the Mr. Qian Concert Group;

1. the Vendor; and (iv) any other parties acting, or presumed to be acting, in concert with any of them, that could be reasonably regarded as a hindrance to our independence as defined under the Takeovers Code and/or Rule 13.84 of the Listing Rules to act as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition and the Whitewash Waiver. We have not, in the past two years prior to the date of this Circular, provided any services to the Company or had any financial or other connection with the Company.

   PRINCIPAL FACTORS AND REASONS CONSIDERED

   In arriving at our opinion and advice in respect of the Acquisition and the Whitewash Waiver, we have considered the following principal factors and reasons:

2. Information on the Group

3. Background information of the Group

   The Group is principally engaged in research, development and sales of feeder cable series, optical fibre cable series and related products, flame-retardant flexible cable series, new-type electronic components and other accessories for mobile communications and telecommunications transmission.

4. Historical financial performance of the Group

Set out below is a summary of the audited consolidated financial results of the Group for the three years ended 31 December 2014 ("FY2014"), 31 December 2015 ("FY2015") and 31 December 2016 ("FY2016"), details of which are set out in the annual report of the Company for the year ended 31 December 2015 (the "2015 Annual Report") and the annual report of the Company for the year ended 31 December 2016 (the "2016 Annual Report").

Year ended 31 December

FY2016 RMB'OOO	FY2015 RM B'OOO	FY2014 RM B' OOO
Turnover	2,920,995	2,913,379	2,658,093
Cost of sales	(2,308,791)	(2,263,320)	(2,065,226)
Gross profit	612,204	650,059	592,867
Gross profit margin	21.0%	22.3%	22.3%
Other income	28,659	22,440	14,869
Other losses	(148,849)	(91,671)	1,230
Selling and distribution costs	(60,663)	(61,849)	(52,258)
Administrative expenses	(56,568)	(52,837)	(47,224)
Research and development costs	(51,448)	(47,049)	(26,709)
Gain recognised on deemed disposal of available-for-sale investments	23,769
Fair value change of warrants	7,604	13,149	(18,317)
Finance costs	(59,804)	(73,293)	(46,538)
Profit before taxation	271,135	358,949	441,689
Taxation	(49,191)	(57,183)	(72,620)
Profit and total comprehensive income

for the year attributable to owners
of the Company	1922608	2752253	3692069

for the year 221,944 301,766 369,069 Profit and total comprehensive income