China Haisheng Juice : DISCLOSEABLE TRANSACTION - FORMATION OF THE JV COMPANY

Hong Kong Exchange 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.

China Haisheng Juice Holdings Co., Ltd.

中國海升果汁控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 0359)

DISCLOSEABLE TRANSACTION -

FORMATION OF THE JV COMPANY

FORMATION OF THE JV COMPANY

The Board is pleased to announce that on 11 December, 2019, Laibin Haisheng entered into a Joint Venture Agreement with Guangxi Laibin Modern Agriculture, pursuant to which Laibin Haisheng and Guangxi Laibin Modern Agriculture have agreed to establish the JV Company with a registered capital of RMB30.0 million (equivalent to approximately HK$33.3 million) and each of Laibin Haisheng and Guangxi Laibin Modern Agriculture has agreed to contribute to the registered capital of the JV Company at RMB19.5 million (equivalent to approximately HK$21.6 million) and RMB10.5 million (equivalent to approximately HK$11.7 million) respectively. The JV Company will be principally engaged in the modernized extensive plantation and sale of apple and other fruits.

IMPLICATIONS UNDER THE LISTING RULES

As the highest applicable percentage ratios (as defined under the Listing Rules) in respect of the formation of the JV Company exceeds 5% and is less than 25%, the entering into Joint Venture Agreement by Laibin Haisheng constitutes a discloseable transaction under Chapter 14 of the Listing Rules is subject to the reporting and announcement requirements, but is exempted from shareholders' approval requirement, pursuant to Chapter 14 of the Listing Rules.

THE JOINT VENTURE AGREEMENT

The board of directors (the "Board") of China Haisheng Juice Holdings Co., Ltd. (the "Company") is pleased to announce that on 11 December, 2019, Laibin Haisheng entered into a Joint Venture Agreement with Guangxi Laibin Modern Agriculture, pursuant to which Laibin Haisheng and Guangxi Laibin Modern Agriculture have agreed to establish the JV Company with a registered capital of RMB30.0 million (equivalent to approximately HK$33.3 million) and each of Laibin Haisheng and Guangxi Laibin Modern Agriculture has agreed to contribute to the registered capital of the JV Company at RMB19.5 million (equivalent to approximately HK$21.6 million) and RMB10.5 million (equivalent to approximately HK$11.7 million) respectively. The JV Company will be principally engaged in the modernized extensive plantation and sale of apple and other fruits. Principal terms of the Joint Venture Agreement are summarised as follows:

1

Date

11 December 2019

Parties

1. Laibin Haisheng; and
2. Guangxi Laibin Modern Agriculture.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, Guangxi Laibin Modern Agriculture and its respective ultimate beneficial owners are Independent Third Parties and not connected with the Company and its connected persons (as defined under the Listing Rules).

Business Scope and Term of Operation

The JV Company will be principally engaged in the modernised extensive plantation and sale of apples and other fruits in Laibin City, Guangxi Province, the PRC. The term of operation of the JV Company is 30 years, commencing on the date of issuance of Business License of the JV Company.

Registered Capital and Capital Contributions

Pursuant to the Joint Venture Agreement, the Parties agree to establish the JV Company with a registered capital of RMB30.0 million (equivalent to approximately HK$33.3 million) and each of Laibin Haisheng and Guangxi Laibin Modern Agriculture has agreed to contribute to the registered capital of the JV Company upon the terms and conditions of the Joint Venture Agreement. Details of the Capital Contributions are as follows:

1. Laibin Haisheng has agreed to contribute RMB19.5 million (equivalent to approximately HK$21.6 million) in cash to the registered capital of the JV Company and which shall be paid before 20 November 2029 by installments according to its proportion of equity interests held in the JV Company; and
2. Guangxi Laibin Modern Agriculture has agreed to contribute RMB10.5 million (equivalent to approximately HK$11.7 million) in cash to the registered capital of the JV Company and which shall be paid before 20 November 2029 by installments according to its proportion of equity interests held in the JV Company.

Upon the completion of the Capital Contributions above, each of Laibin Haisheng and Guangxi Laibin Modern Agriculture would hold 65.0% and 35.0% of the equity interests of the JV Company respectively.

2

The capital contribution by Laibin Haisheng will be funded by the Group's working capital. The amount of capital contribution by Laibin Haisheng was arrived at arm's length negotiations between the Parties with reference to (a) the future capital requirement by the JV Company and (b) the percentage of equity interests held by Laibin Haisheng in the JV Company.

Restriction on Equity Transfer

Without the prior written consent of the other party, either party to the Joint Venture Agreement shall not transfer its equity interests in the JV Company. If the other party agrees to the transfer of equity interests, such other party shall have the right of first refusal under the same conditions.

REASONS AND BENEFITS DERIVED FROM THE CONTRIBUTIONS

The Group has built around 80 fruits and vegetables production bases in the PRC and is principally engaged in business including breeding and sale of infant apple trees; intensive apple dwarf rootstocks plantation and; selection, packaging and sale of apples.

It is expected that the JV Company will help the Group to expand its business in plantation and sale of apple and other fruits further in Laibin City, Guangxi Province, the PRC.

The Directors (including the independent non-executive Directors) are of the view that the formation of the JV Company is in the interests of the Group and the Shareholders as a whole and the terms of the Joint Venture Agreement and the transactions contemplated thereunder are on normal commercial terms and are fair and reasonable.

INFORMATION ON THE PARTIES TO THE JOINT VENTURE AGREEMENT

Laibin Haisheng is a non wholly-owned subsidiary of the Group and principally engaged in plantation and sale of apples and other fruits.

Guangxi Laibin Modern Agriculture is wholly-owned by State-Owned Assets Supervision and Administration Commission of the People's Government of Laibin Municipality and is principally engaged in development and investment in agriculture in Laibin City, Guangxi Province, the PRC.

INFORMATION ON THE GROUP

The Group is principally engaged in the manufacture and sale of fruit juice concentrate and related products and plantation and sale of apples and other fruits.

FINANCIAL EFFECT OF THE CAPITAL CONTRIBUTION

Upon completion of the Capital Contributions, the JV Company will be accounted for by the Group as a non-wholly owned subsidiary. The capital contribution will be accounted for as an equity transaction that will not result in the recognition of any gain or loss in profit or loss.

3

IMPLICATIONS UNDER THE LISTING RULES

As the highest applicable percentage ratios (as defined under the Listing Rules) in respect of the contribution of registered capital by Laibin Haisheng exceeds 5% and is less than 25%, the capital contribution by Laibin Haisheng constitutes a discloseable transaction under Chapter 14 of the Listing Rules is subject to the reporting and announcement requirements, but is exempted from shareholders' approval requirement, pursuant to Chapter 14 of the Listing Rules.

As none of the Directors has material interests in the formation of the JV Company, none of them has to abstain from voting on the Board resolutions approving the Joint Venture Agreement and the transactions contemplated thereunder pursuant to the articles of association of the Company.

DEFINITIONS

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

4

Xi'an, the People's Republic of China, 11 December, 2019

5

As at the date of this announcement, the executive directors are Mr. Gao Liang, Mr. Wang Junqing, Mr. Wang Yasen and Mr. Wang Linsong; the independent non-executive directors are Mr. Zhao Boxiang, Mr. Liu Zhongli and Ms. Huang Liqiong.

In this announcement, RMB has been converted to HK$ at the rate of RMB1= HK$1.11 for illustration purpose only. No representation is made that any amounts in RMB or HK$ have been, could have been or could be converted at the above rate or at any other rates or at all.

*  For identification purpose only.

6