VOLUNTARY ANNOUNCEMENT DISPOSAL OF A SUBSIDIARY

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1 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 Bermuda with limited liability) (Stock code: 851) VOLUNTARY ANNOUNCEMENT DISPOSAL OF A SUBSIDIARY DISPOSAL This announcement is made by the Company on a voluntary basis. On 28 June 2018 (after trading hours), the Company and the Purchaser entered into a Disposal Agreement pursuant to which the Company has agreed to sell, and the Purchaser has agreed to acquire the Sale Shares, being the entire issued share capital of the Target Company, at the consideration of HK$4,000, Completion of the Disposal took place on 28 June 2018 and the Target Company ceased to be a subsidiary of the Company since then. The transactions contemplated under the Disposal Agreement do not constitute any notifiable transaction of the Company under Chapter 14 of the Listing Rules. 1

2 DISPOSAL This announcement is made by the Company on a voluntary basis. Reference is made to the announcement of the Company dated 18 April 2018 in relation to the Disposal. On 28 June 2018 (after trading hours), the Company and the Purchaser entered into a Disposal Agreement pursuant to which the Company has agreed to sell, and the Purchaser has agreed to acquire the Sale Shares, being the entire issued share capital of the Target Company, at the consideration of HK$4,000, Completion of the Disposal took place on 28 June 2018 and the Target Company ceased to be a subsidiary of the Company since then. Major terms of the Disposal Agreement are set out below. THE DISPOSAL AGREEMENT Date 28 June 2018 Parties (1) the Company (as vendor); and (2) Fame Grace Investment Limited (as purchaser) Fame Grace Investment Limited is a company incorporated in Hong Kong and is principally engaged in investment holding. To the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, the Purchaser and its beneficial owner(s) are Independent Third Parties. Subject Matter of the Disposal The Sale Shares represent the entire issued share capital of the Target Company upon Completion. Prior to Completion, the Target Company was a wholly-owned subsidiary of the Company and indirectly owns % of the equity interest in Xin Hua Merchandise Exchange. 2

3 Consideration The consideration for the Disposal is HK$4,000, and has been paid in cash and satisfied on the Completion Date by the Purchaser. The consideration was determined after arm s length negotiation with reference to the unaudited net assets value of the Target Group of approximately HK$1.2 million as at 31 May Having considered the above and the factors described in the paragraph headed Reasons for and benefits of the Disposal below, the Directors consider the consideration to be fair and reasonable and on normal commercial terms and in the interest of the Shareholders as a whole. Completion Completion of the Disposal took place on the Completion Date, i.e. 28 June 2018 and the Company ceased to hold any beneficial interest in the Target Company since then. INFORMATION RELATING TO THE COMPANY AND THE TARGET COMPANY The Group is principally engaged in the provision of securities brokerage and financial services and asset management services. The Target Company is an investment holding company incorporated in Hong Kong. The Target Company indirectly owns % of the equity interest in Xin Hua Merchandise Exchange. Xin Hua Merchandise Exchange is engaged in the operation of an electronic merchandise exchange platform for commodity goods trading, which provides trading, clearing financing and logistics services to suppliers and purchasers on the electronic trading platform. Xin Hua Merchandise Exchange was established under the laws of the PRC on 11 November 2011 and approved by the Department of Commerce of Heilongjiang Province, the PRC. The financial information of Target Group for the two financial years ended 31 December 2017 according to its management accounts is set out below: For the year ended 31 December (HK$ 000) (HK$ 000) Profit/(loss) before tax (73,905) 1,804 Profit/(loss) after tax (73,905) 1,804 3

4 As at 31 May 2018, the unaudited net assets value of Target Group was approximately HK$1.2 million. REASONS FOR AND BENEFITS OF THE DISPOSAL The Group is of the view that the Disposal provided an opportunity for the Group to cut ongoing loss of the Target Group and realise its investment in the Target Group, and will allow the Group to focus on its core businesses of financial services businesses. Following the Completion, the Company no longer holds any interest in Xin Hua Merchandise Exchange, and Xin Hua Merchandise Exchange ceases to be recognised as an associate in the consolidated financial statements of the Company. The Directors consider that the terms of the Disposal Agreement have been entered into on normal commercial terms, and that such terms are fair and reasonable so far as the Company and the Shareholders are concerned, and is in the interests of the Company and the Shareholders as a whole. FINANCIAL EFFECT OF THE DISPOSAL It is expected that the Group will record a loss of approximately HK$3.4 million from the Disposal, which is calculated with reference to the difference of the consideration for the Disposal and the unaudited net assets value of the Target Group attributable to the Group as at 31 May 2018 and the adjustment on exchange reserve released on Disposal of approximately HK$6.2 million to the consolidated statement of profit or loss of the Company. It is expected that the Disposal would not have material impact on the consolidated statement of the financial position of the Company. The Board intends to use the net proceeds arising from the Disposal as general working capital of the Company. The transactions contemplated under the Disposal Agreement do not constitute any notifiable transaction of the Company under Chapter 14 of the Listing Rules. 4

5 DEFINITIONS In this announcement, the following expressions shall, unless the context requires otherwise, have the following meanings:- Board the board of Directors Company Sheng Yuan Holdings Limited, a company incorporated in Bermuda with limited liability, the issued Shares of which are listed on the Main Board of the Stock Exchange (stock code: 851) Completion completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the Disposal Agreement Completion Date 28 June 2018 connected person(s) has the meaning ascribed thereto in the Listing Rules Director(s) director(s) of the Company Disposal the proposed disposal of the Sale Shares pursuant to the terms of the Disposal Agreement Disposal Agreement the Disposal Agreement dated 28 June 2018 and entered into between the Company and the Purchaser in relation to the Disposal Group the Company and its subsidiaries HK$ Hong Kong dollar, the lawful currency of Hong Kong Hong Kong the Hong Kong Special Administrative Region of the People s Republic of China 5

6 Independent Third Party(ies) third party(ies) and their ultimate beneficial owner(s) (if applicable) which are independent of the Company and its connected persons (as defined under the Listing Rules) Listing Rules the Rules Governing the Listing of Securities on the Stock Exchange PRC the People s Republic of China, which for the sole purpose of this announcement excludes Hong Kong, Macau Special Administrative Region and Taiwan Purchaser Fame Grace Investment Limited, a limited liability company incorporated in Hong Kong Sale Shares 10,000 shares of the Target Company which have been issued and fully paid up and represents the entire issued share capital of the Target Company Share(s) ordinary share(s) in the issued and unissued capital of the Company, the par value of which being of HK$0.05 each Shareholder(s) the holder(s) of Shares Stock Exchange The Stock Exchange of Hong Kong Limited Target Company Joinbo Holdings Limited, a limited liability company incorporated in Hong Kong on 1 December 2008 and a wholly-owned subsidiary of the Company prior to Completion Target Group the Target Company and its subsidiaries Xin Hua Merchandise Exchange Xin Hua Merchandise Exchange Limited, a company established in the PRC with limited liability 6

7 % per cent By order of the Board Sheng Yuan Holdings Limited Qiu Bin Executive Director and Chief Executive Officer Hong Kong, 29 June 2018 As at the date of this announcement, the Board consists of Mr. Qiu Bin and Ms. Cheng Kit Sum, Clara (all being executive Directors), Mr. Chen Zhong Min (being non-executive Director), Mr. Fung Tze Wa, Dr. Huan Guocang and Mr. Lo Ka Wai (all being independent non-executive Directors). 7